News & Publications

Common Interest Privilege: The Risks of Sharing Work

Submitted By Firm: McLennan Ross, LLP

Contact(s): Gerhard Seifner, Glenn D. Tait, Teresa R. Haykowsky

Author(s):

James C. Lingwood

Date Published: 4/16/2012

Article Type: Legal Article

Share This:

…it is important that the fundamental professional standards be maintained and
indeed improved. This is essential if the confidence of the public that the law is
a profession is to be preserved and hopefully strengthened. Nothing is more
important to the preservation of this relationship than the confidentiality of
information passing between a solicitor and his or her client...

Sopinka, J. for the Majority of the Supreme Court of Canada in MacDonald
Estate v. Martin
, [1990] 3 SCR 1235 at para. 12.

The solicitor-client privilege attached to communication between lawyers and
their clients is perhaps the most important hallmark of the legal profession. This allows clients to
explore their options and “bare their souls” without fear of repercussion, in order to better
understand their legal position, rights and obligations.

Typically, privilege must be guarded. However, in some circumstances, it may be beneficial to
share privileged information with other parties in order to mount a joint front against a “common
foe”. This is the concept of Common Interest Privilege (“CIP”).

CIP exists where one party voluntarily discloses its privileged record to another party who shares a
common interest in the litigation connected to that record. In this situation, the party receiving the
record also enjoys privilege, so long as the common interest exists at the time the document is
disclosed. 1 To show a common interest, the parties must demonstrate that the third party with
whom the information is shared has a sufficient common interest with the client holding the initial
privilege.

Obviously, the advantages of a unified defence in a prosecution under the Occupational Health and
Safety Act
are manyfold. Where there are two or more co-accused seeking to challenge the actus
reus of the charges or to establish a cooperative due diligence defence, access to one another’s
documents and witnesses may be critical. Even where one party has not yet been named as an
accused, it is possible that the party may anticipate being named and can therefore claim CIP and
begin sharing privileged information in contemplation of the possible litigation.

However, it is possible that two parties sharing privileged information, may become adverse in
interest, such as when one accused party advances a “cutthroat defence” arguing all fault lies with
the co-accused. In such circumstances, what happens to the privileged information that was shared? Can one party rely on it to the detriment of others?

The general rule regarding privilege has been that only the client (or his or her lawyer) may waive
privilege intentionally or through inadvertent disclosure of that information. But in the
circumstances of common interest, both parties hold interest. Does this mean that either one can
waive that privilege if the parties subsequently become adverse? The short answer is no.

To begin, it is important to note that the possibility of a “cutthroat” defence in the future is not
grounds to eliminate the privilege at the time it was made. For example, in 2010 the Ontario
Superior Court held that “the possibility that parties might at some future point in time become
adverse in interest is insufficient to denying the existence of a common interest privilege at
present.” This assists the argument of the party resisting any application for production of evidence
as it establishes that privilege existed at the time the record was shared with the party.

The critical concern for counsel contemplating sharing information is whether privilege persists
when “friends” become “foes”. In Alberta, courts have held that even after the parties sharing
common interest become adverse in litigation, CIP remains intact. Where one party created the
record and then shared it with another party under CIP, only the party holding the original privilege
could waive that privilege - meaning that the originating party retains privilege over documents
distributed to persons with a common interest.

This reasoning follows the general rule that privilege is lost only when waived by the party who
holds the privilege. Therefore, CIP is not destroyed when the recipient develops an adverse interest.
Privilege is maintained until waived by the party holding that privilege. The party who created the
documents maintains its privilege when disclosing to another party through CIP, unless a waiver of
privilege was intended. The party seeking to adduce the information cannot complain of unfairness
since they never would have received the information without the common interest privilege.

For these reasons, privilege can be maintained over documents shared with a party who later
becomes adverse in interest, so long as common interest was established at the time of the sharing and was not subsequently waived.

It should be noted that CIP can only be used as a defence to prevent disclosure over information
created by or for the party seeking to prevent its use. It cannot be used as a sword to assert privilege
over a record created and shared by another party under common interest privilege, as the privilegestill belongs to the party creating the record. For example, if one accused party shared an opinion that certain procedures did not establish a due diligence defence with a co-accused, the co-accused could not prevent the accused party from sharing that information with the Crown through CIP, since the privilege attaches to the party who created the opinion.

This suggests to clients and their counsel that privilege can be maintained, even where the
privileged record was shared with a party who is now adverse in interest to the client, and should
encourage counsel to consider sharing information in a joint defence.

However, an additional word of warning is warranted, since disclosure may eliminate privilege even
without a waiver. Justice Slatter in Pinder v. Sproule, 2003 ABQB 33, canvassed the law of loss of
privilege due to disclosure even where a waiver has not occurred. In the case of common interest
privilege, it is possible that the receiving party (or the originating party) may inadvertently or
deliberately disclose the shared information without waiving privilege. The Court held that unless
there is still a legitimate interest to be protected, or maintaining privilege would create unfairness or
prejudice to a party, the Court may not maintain the privilege, taking into account the integrity of
the justice system. Justice Slatter concluded that this reasoning would “cover most instances of the
common interest privilege”.

Given these considerations, it would be prudent to enter into confidentiality agreements respecting
the limited use of shared privileged material. This provides courts with additional reasons to
maintain privilege in the face of an actual disclosure by the formerly common interest party. Such
agreements may also allow the aggrieved party to seek damages for a breach should any loss flow
from the use of that information against the sharing party. While these agreements seem prudent,
there appears to be no judicial consideration of such agreements and so any ability to rely on them
is merely speculative.

In conclusion, a party is free to share privileged information with another party if it can establish
that the two parties have a common interest and that privilege is not intended to be waived. That
privilege extends beyond the period in which the two parties remain in that relationship and into
periods in which the parties may become adverse to one another. However, where disclosure of the
shared privileged records occurs, either inadvertently or through a deliberate disclosure by the now
adverse party, a court may be reluctant to uphold the privilege.

At the very least, parties should consider the potential for disclosure when entering into common
interest sharing agreements. They should enter into confidentiality agreements with respect to
shared materials so that there are reasons for maintaining the privilege in the face of any disclosure,
or at least, an ability to claim damages for a breach of the confidentiality agreements should any
loss or damage flow from the release of privileged information by a formerly common interest, now
adverse, party.

Find an Employment Lawyer

In all 50 U.S. states, every Canadian province, and over 135 countries. View or print a complete ELA member list by clicking here.

Find an Immigration Lawyer

Facilitate employee transfers around the globe. View or print a complete ELA member list by clicking here.

International Background Checks Summaries

Your free resource summarizing the requirements for pre-employment checks around the world.

Client Successes

Altra Industrial Motion Inc.

Altra Industrial Motion Inc. has multiple locations in the U.S., as well as Central America, Europe, and Asia. The Employment Law Alliance has proved to be a great asset in assisting us in dealing with employment issues and matters in such diverse venues as Mexico, Australia, and Spain. We have obtained excellent results using the ELA network for matters ranging from a multi-state review of employment policies to assisting with individual employment issues in a variety of foreign jurisdictions.

In one instance, we were faced with an employment dispute with a former associate in Mexico that had the potential for substantial economic exposure. The matter had been pending for over a year, and we were not confident in the employment advice we had been receiving. I obtained a referral to the ELA counsel in Mexico, who was able to obtain a favorable resolution of the dispute in only a few days. Based on our experiences with the ELA, we would not hesitate to use its many resources for future employment law needs.

American University in Bulgaria

In my career I have been a practicing attorney, counsel to the Governor of Maine, and CEO of a major public utility. I have worked with many lawyers in many settings. When the American University in Bulgaria needed help with employment litigation in federal court in Syracuse, New York, we turned to Pierce Atwood, the ELA member we knew and trusted in Maine, for a referral. We were extremely pleased with the responsiveness and high quality of service we received from Bond Schoeneck & King, the ELA's firm in upstate New York. I would not hesitate to recommend the ELA to any employer.

David T. Flanagan
Member of Board of Trustees 

Arcata Associates

I really enjoyed the Conducting an Effective Internal Investigation in the United States webinar.  We are in the midst of a rather delicate employee relations issue in California right now and the discussion helped me tremendously.  It also reinforced things that you tend to forget if you don't do these investigations frequently.  So, many, many thanks to the Employment Law Alliance for putting that webinar together.  It was extremely beneficial.

Lynn Clayton
Vice President, Human Resources

Barrett Business Services, Inc.

I recently participated in the ELA-sponsored webinar on the Employee Free Choice Act.  I was most impressed with that presentation.  It was extremely helpful and very worthwhile.  I have also been utilizing the ELA's online Global Employer Handbook.  This compliance tool is absolutely terrific. 

I am familiar with several other products that purport to provide up-to- date employment law information and I believe that this resource is superior to other similar compliance manuals.  I am delighted that the ELA provides this free to its members' clients.

Boyd Coffee Company

Employment Law Alliance (ELA) has provided Boyd Coffee Company with a highly valued connection to resources, important information and learning. With complex operations and employees working in approximately 20 states, we are continually striving to keep abreast of specific state laws, many of which vary from state to state. We have participated in the ELA web seminars and have found the content very useful. We appreciate the ease, cost effectiveness and quality of the content and presenters offered by these web seminars.  The Global Employer Handbook has provided our company with a very helpful overview of legal issues in the various states in which we operate, and the network of attorneys has helped us manage issues that have arisen in states other than where our Roastery and corporate headquarters are located in Portland, Oregon.

Capgemini Outsourcing Services GmbH

As an international operating outsourcing and consulting supplier Capgemini has used firms of the Employment Law Alliance in Central Europe. We were always highly satisfied with the quality of employment law advice and the responsiveness. I can really recommend the ELA lawyers.

Hirschfeld Kraemer

As an employment lawyer based in San Francisco, I work closely with high tech clients with operations around the globe. Last year, one of my clients needed to implement a workforce reduction in a dozen countries simultaneously. And they gave me 48 hours to accomplish this. I don't know how I could have pulled this off without the resources of the ELA. I don't know of any single law firm that could have made this happen. My client received all of the help they needed in a timely fashion and on a cost effective basis.

Stephen J. Hirschfeld
Partner 

Hollywood Entertainment Corporation

As the Vice President for Litigation & Associate General Counsel for my company, I need to ensure that we have a team of top-notch employment lawyers in place in every jurisdiction where we do business. And I want to be confident that those lawyers know our business so they don't have to reinvent the wheel when a new legal matter arises. With more than 3400 stores and 35,000 employees operating in all 50 U.S. states and across Canada, we rely on the ELA to partner with us to help accomplish our objectives. I have been delighted with the consistent high quality of the work performed by ELA lawyers. I encourage other in-house counsel to use their services, as well.

Ingram Micro

Ingram Micro is the world's largest technology distributor, providing sales, marketing, and logistics services for the IT industry around the globe. With over 13,000 employees working throughout the U.S. and in 35 international countries, we need employment lawyers who we can count on to ensure global legal compliance. Our experience with many multi-state and multi-national law firms is that their employment law services are not always a high priority for them, and many do not have experts in many of their offices. The ELA has assembled an excellent team of highly skilled employment lawyers, wherever and whenever I need them, and they have proven to be an invaluable resource to our company.

Konami Gaming

Our company, Konami Gaming, Inc., is growing rapidly in a very diverse and highly regulated industry. We are aggressively entering new markets outside the domestic U.S., including Canada and South America. I have had the recent opportunity to utilize the services provided by the ELA. The legal advice was both responsive and professional. Most of all, the entire process was seamless since our Nevada attorney coordinated the services and legal advice requested. I look forward to working with the ELA in the future, as it serves as a great resource to the legal community.

Jennifer Martinez
Vice President, Human Resources

Nikkiso Cryo, Inc.

Until recently, I was unaware of the ELA's existence. We have subsidiaries and affiliates throughout the United States, as well as in Asia, the Middle East and Europe. When a recent legal issue arose in Texas, our long-time Nevada counsel, who is a member of the ELA, suggested that this matter be handled by his ELA colleague in Dallas. We are very pleased with the quality and timeliness of services provided by that firm, and we are excited to now have the ELA as an important asset to help us address employment law issues worldwide.

Palm, Inc.

The ELA network has been immensely important to our company in helping us address an array of human resources challenges around the world. I strongly encourage H.R. executives who have employees located in many different jurisdictions to utilize the ELA's unparalleled expertise and geographic coverage.

Stacy Murphy
Former Senior Director of Human Resources

Rich Products

As the General Counsel for a company with 6,500 employees operating across the U.S. and in eight countries, it is critical that I have top quality lawyers on the ground where we do business. The ELA is an indispensable resource. It has taken the guesswork out of finding the best employment counsel wherever we have a problem.

Jill K. Bond
Senior Vice President/General Counsel, Shared Services and Benefits

Ricoh Americas Corporation

We have direct sales and service offices all over the U.S., but have not necessarily had the need in the past for assistance with legal work in every state where we have a business presence. From time to time, we suddenly find ourselves facing a legal issue in a state where we have no outside counsel relationship. It has been a real benefit to know that the ELA has assembled such an impressive team of experts throughout the U.S. and overseas.

A few years ago, we faced a very tough discrimination lawsuit in Mississippi. We had never had to retain a lawyer there before. I was absolutely delighted with the Mississippi ELA firm. We received an excellent result. They will no doubt handle all of our employment law matters in Mississippi in the future. I have also obtained the assistance of several other ELA firms around the U.S. and have received the same outstanding service. The ELA is a tremendous resource for our company.

Roberts-Gordon LLC

Our affiliated companies have used the Employment Law Alliance in connection with numerous acquisitions, and have always been extremely pleased with our ability to obtain the highest quality legal advice on due diligence issues from jurisdiction to jurisdiction. We have found the Employment Law Alliance firms to be not only first rate with respect to their legal advice but also responsive and timely in assisting us with federal and state law issues critical to our due diligence efforts. We consider the Employment Law Alliance to be an important part of our team.

Rockwell Collins, Inc.

We have partnered with many ELA firms on the development and execution of case management strategies with very positive results. We have been very pleased with the legal advice and counsel provided by the law firms we have utilized who are affiliated with the Employment Law Alliance. The ELA firms we have worked with are customer focused, responsive, and thorough in their approach to handling labor and employment law matters.

Elizabeth Daly
Assistant General Counsel

Sanmina-SCI

Sanmina-SCI has facilities strategically located in key regions throughout the world. Our customers expect that we will provide them with the highest quality and most sophisticated services in the marketplace. We have that same expectation for the lawyers with whom we do business. With operations in 17 countries, we need to be certain that we have a team of lawyers working together to address our employment law needs worldwide. The ELA has delivered exactly what it promised-- seamless and consistent high quality services delivered in each locale around the globe. It has quickly become a key asset for our human resources department.

Starwood

We own, manage, and franchise hotels throughout the U.S. and in more than 90 countries. With more than 145,000 employees worldwide, ensuring that we comply with the complex web of local labor and employment laws in every one of these jurisdictions is a daunting task. The Employment Law Alliance has served as an important resource for us and we have benefited greatly from its expertise and long reach. When a legal dispute or issue has arisen in some far-flung place, Employment Law Alliance lawyers have always provided responsive, practical, and cost-effective assistance.

Wilmington Trust Corporation

Wilmington Trust has used the ELA to locate firms in California, Washington State, Georgia, and Europe. Our experience with the ELA lawyers with whom we have worked has always been one of complete satisfaction and prompt, practical advice.

Michael A. DiGregorio
General Counsel  

Loading...