January 31, 2007
In multi-party litigation, litigants who share a common opponent often have a common interest in proving that opponent wrong. These litigants can be co-plaintiffs who both claim that a defendant has wronged them; or co-defendants who both claim that a plaintiff's allegations are without merit. In this overlap of interest—or the litigation common ground—certain facts, legal positions, or strategies can serve the collective interests of both litigants to the detriment of the common opponent. To leverage the collective resources of the parties with a "common interest," the law allows for a "common interest privilege."
The situations where the common interest privilege could apply are as diverse and varied as the legal landscape: contractors and sub-contractors defending a construction defect claim; manufacturer and distributor of a product alleged to be defective; parent and affiliate corporations defending corporate conduct; employee and employer defending against allegations of misconduct; or driver and passenger involved in an automobile accident. In all of these situations, the parties may retain separate counsel to avoid either actual or potential conflicts of interest, while at the same time having something in common with the other. See Securities Investor Protection Corp. v. Stratton Oakmont, Inc., 213 B.R. 433, 438 (S.D.N.Y. 1997).
In these varied situations, the purpose of the common interest privilege was developed to promote efficiency in litigation. Id. at 439. When a community of interest exists between two or more litigants in any situation, the law holds that the parties "should be able to [freely] communicate with their respective attorneys and with each other to more effectively prosecute or defend their claims." See United States v. Weissman, 195 F.3d 96, 124 n. 3 (2d Cir. 1999). To promote efficiency, the common interest privilege "widens the circle of persons to whom clients may disclose privileged communications" (Boyd v. Comdata Network, Inc., 88 S.W.3d 203, 214 (Tenn. Ct. App. 2002) to include communications between the clients and any of the attorneys, and, in some states, for the work product exchanged between any of the attorneys. Id. at 214.
Undertaking a common strategy with another litigant will be a critical decision in which the unique questions of law and strategy of each case will need to be considered. The decision to proceed with a common strategy, and to reveal confidences to a co-litigant, should always be a conscious one, and the parameters of the alliance should be carefully circumscribed. The factors which must be met to legally create the privilege are as follows:
- the communication must occur because of actual or anticipated litigation;
- the disclosure must be "for the purpose of furthering a common interest" in that litigation;
- the communication must be confidential; and
- there is no waiver of the privilege. Boyd, 88 S.W.3d at 214-15.
It is critically important to define what the common legal strategy is at the inception of the relationship, and prior to the disclosures taking place. This common ground can be, but does not need to be, memorialized in a joint defense agreement or joint strategy agreement. Regardless of whether a formal written agreement is executed, both the client and the lawyer should be aware of these parameters and take steps to ensure that the communications and disclosures that are taking place relate to the common strategy that exists with the co-litigant.
Litigants with a common interest should proceed carefully and deliberately, with full knowledge of the rules of the game and the parameters of the privilege. Litigation, like misery, can cause unique alliances. It is imperative that the proper steps are taken to keep these communications and disclosures confidential.