Clients are often uncertain or confused about what constitutes the attorney-client privilege and its purposes and protections. Generally speaking, the attorney-client privilege keeps communications between attorneys and their clients confidential and protects the substance of those discussions from disclosure or use by an opposing party.
The attorney-client privilege is intended to encourage clients to be forthcoming, honest and truthful and not to hide information from their lawyers, since their attorneys cannot reveal the matters disclosed without the client’s consent. Those communications remain confidential unless and until the privilege is waived by the client.
This raises the important questions as to whom does the privilege belong and who is the client. In the case of a bank which has engaged either in-house or outside counsel, the client is the bank itself. An account officer discussing a legal matter with an attorney retained by the bank need not worry that his disclosures or words will be disclosed by the attorney outside of the bank, unless the bank deems it warranted. However, since the privilege belongs to the bank which engaged the attorney and not to the individual officer, those communications can be freely disseminated to persons with need to know within the organization without violating the privilege.
The power to waive the attorney-client privilege belongs to the client and the client can choose to waive the privilege and disclose information subject to protection by the privilege. The issue that most often arises and creates problems, however, is that the privilege can be waived not just intentionally but also unintentionally or carelessly. Once the privileged information or communication is disclosed to persons outside of the bank, the privilege may be lost. Like toothpaste out of the tube, it is not easily put back inside the tube. As a result, care is required not to engage in any disclosures that could be deemed a waiver of the privilege. In this regard, a partial waiver of the privilege on a particular topic may result in a full waiver as to any other privileged communications on that topic. The broader the inadvertent or negligent disclosure, the broader the potential loss of the privilege may be.
The potential for an unintended waiver of the privilege most often results in the following (non-exhaustive) situation:
- Disclosure of the privileged communication or information to third parties. Do not discuss your communications with bank’s counsel with anyone outside of the bank or in an elevator or some other public place where it might be overheard.
- Careless forwarding of emails. Never forward emails or other communications from bank’s counsel to a borrower. (Note the communication with counsel may be several frames removed from the top email in the chain). We have seen instances where a borrower asks a loan officer a legal question concerning a loan. The loan officer forwards the question to bank’s counsel for advice on how best to respond. When the lawyer’s response is received, the busy account officer simply forwards the lawyer’s response to the borrower. Never do this! This not only may waive the privilege as to the specific question being asked, but if there is a long email chain of communications between the loan officer and the lawyer that is included with the forwarded email, all manner of confidential strategies, concerns and potential problems with loan documents or contemplated actions may be revealed as well. This will result in both (a) a potential waiver of the privilege and (b) disclosure of the very strategies and goals the bank is working towards to the borrower who may use that information to the bank’s disadvantage. Always paraphrase or “cut and paste” the communications from your counsel if you wish to respond to a borrower and make it appear that the answer came from you, not your lawyer.
- Never carelessly distribute lawyer e-mails, drafts of documents with lawyer comments, legal analyses or opinions or other attorney-client documents to anyone outside of the bank.
- Always check the addresses to an email to make sure you have the correct persons only included in the communication. Auto-complete features in email systems can result in disaster if used carelessly.
- Do not allow third parties to listen in on communications between you and your lawyers, unless specifically disclosed to and approved by the bank’s attorneys. Related to this, never communicate directly with a lawyer representing a borrower, without including your own lawyer on the communication.
- Generally, even within the bank, limit your discussions about attorney-client communications to those directly involved in the matter so as to avoid inadvertent disclosures.
- Note, simply adding a “cc” to lawyer on an otherwise not privileged email, such as between you and your colleagues, does not make the communication privileged and protect it from disclosure. The asking for, and giving of, legal advice is part and parcel of the attorney-client privilege attaching to the communication.
The attorney-client privilege is a great protection and resource. As with all valuable things it needs to be guarded and protected and not be treated carelessly.
This communication is for informational purposes only and should not be construed as legal advice on any specific facts or circumstances.
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