DISCUSSIONS OF LEGAL ADVICE BY CORPORATE EMPLOYEES IS ENCOMPASAED WITHIN THE ATTORNEY-CLIENT PRIVILEGE, EVEN WHEN ATTORNEYS ARE NOT INVOLVED IN THE DISCUSSIONS
A California court of appeals has held that the corporate attorney-client privilege extends to confidential communications between an insurer’s employees regarding legal advice and strategy if reasonably necessary for the transmission of that information or to further the purpose of the legal consultation, even when the corporation’s attorneys are not directly involved or when the communications do not include excerpts of direct communications from the attorneys. The trial court, relying on the recommendations of a discovery referee, had determined that only documents created by counsel or involving direct communications between the insurer and its counsel were protected under this privilege. Accordingly, it ordered the production of a number of documents from the insurer’s claim files, which contained reserve and reinsurance information. The insurer sought a writ of mandate from the court of appeals to compel the trial court to vacate this production order. The appellate court concluded that corporations could only act through agents, and that the discussion of legal advice by agents for the purpose of implementing that advice came within the attorney-client privilege, whether or not counsel were directly involved in such discussions. Zurich American Insurance Co. v. Superior Court, No. B194793 (Cal. Ct. App. Oct. 11, 2007).
This post written by Brian Perryman.
