In certain circumstances, where application of the attorney-client privilege does not serve the purpose for which it is intended, courts deem the privilege waived. An important consideration in assessing the issue of waiver is fairness. The factors common to those circumstances where courts disallow the rules of privilege: (1) assertion of the privilege is a result of some affirmative act, such as filing suit, by the asserting party; (2) through this affirmative act, the asserting party puts the protected information at issue by making it relevant to the case; and (3) application of the privilege would deny the opposing party access to information vital to his defense. Where these three conditions exist, a court should find that the party asserting a privilege has impliedly waived it through his own affirmative conduct.
Appellant estate administrator sought review of an order from the Superior Court of the District of Columbia, which, in an action against appellee insurance association for negligence and bad faith breach of an insurance contract in refusing to settle a case within the insurance policy limit, ruled that discovery matters previously withheld as privileged by the attorney client relationship were waived and were admissible. The issue on appeal was whether material that was withheld from discovery by the insurance company under the attorney client privilege could have later been used by the insurance company at trial. During a personal injury action against the insured, the insurance company undertook negotiations but refused to settle within the policy limits, and the trial resulted in a substantially higher liability for the insured. The insured filed suit against the insurance company and the administrator was substituted for him when he died. In a suit filed against the insurance company for the increased liability, the insurance company, just before trial, declared that it intended to use certain documents that had previously been withheld as privileged, which the trial court allowed over the administrator's objections. On review the court disagreed. The court reversed and remanded for a new trial because the court could not conclude that the trial court's erroneous rulings were harmless.
Can material that was withheld from discovery by the insurance company under the attorney client privilege could have later been used by the insurance company at trial?
Where a party authorized partial disclosure, the entire privilege had to be treated as waived. The court held that discovery of material that was asserted as privileged could not have been circumvented by delaying a waiver of the privilege until a strategically advantageous stage of trial.