Important Decision for In-House Counsel on Privilege and Work Product Waiver
In-house counsel whose clients employ external consultants—and in particular PR firms—should take a close look at the Pennsylvania Supreme Court’s June 18 decision in Bousamra v. Excela Health (2019 Pa. LEXIS 3277). The Court addressed when disclosure to external consultants hired directly by the company leads to waiver of the work product doctrine and the attorney-client privilege. The standards for waiver as to each are different, said the Court, and under the facts of the case, disclosure to the PR consultant did not necessarily result in waiver of the work product doctrine, but it did result in waiver of the attorney-client privilege.
In Bousamra, a health system planned to publicly announce that procedures some doctors performed at one of its hospitals were medically unnecessary. It anticipated litigation from the doctors who performed the procedures as well as adverse publicity, leading it to retain both outside counsel and a PR firm. Outside counsel sent the health system’s general counsel an email that contained work product. The general counsel, in turn, forwarded outside counsel’s email to the company’s lead consultant at the external PR firm. The lead consultant then forwarded the email to a few of her colleagues. In the anticipated litigation, the doctor-plaintiff argued that disclosure to the third-party PR firm and to others therein waived the attorney work product doctrine and the attorney-client privilege.
The Commonwealth’s highest court rejected the plaintiff’s argument that disclosure to the PR firm waived the attorney work product doctrine. Noting that the purpose of the work product doctrine is to keep the attorneys’ mental impressions, opinions, etc. out of the hands of an adversary, the Court concluded that “disclosure does not always undermine [the doctrine’s] purpose.” Rather, it held, “the work product doctrine is waived when the work product is shared with an adversary, or disclosed in a manner which significantly increases the likelihood that an adversary or anticipated adversary will obtain it.” It remanded the case to allow the trial court to determine whether the disclosure met this standard. It urged the trial court to consider “whether a reasonable basis exists for the disclosing party to believe ‘that the recipient would keep the disclosed material confidential.’” However, it cautioned that the “level of confidentiality…should not be conflated with the heightened level of confidentiality required under the attorney-client privilege.”
Although the health system prevailed (at least temporarily) on the work product doctrine, the Court agreed with plaintiff that the general counsel’s disclosure resulted in waiver of the attorney-client privilege. The Court recognized that federal courts in California, D.C. and New York had extended the privilege to communications with PR firms. And, it recognized that under Pennsylvania precedent, the privilege could potentially cover communications with both a company’s (client’s) agents and with a lawyer’s agents. However, the Court established a narrow class of consultant-related communications that would qualify for the privilege: the communications must solicit (or, presumably, provide) the consultant’s “input, advice, or opinion” for the purpose of “facilitat[ing] the lawyer’s ability to give legal advice to the client.” That did not happen here, the Court observed, and so the general counsel’s disclosure resulted in waiver. Note that the Court did not rule out the possibility that certain communications with PR consultants could meet the standard it identified, but it seemed to take a dim view of the likelihood (“while situations may arise [in the modern practice of law] that require a public relations firm to provide insight, advice or opinion on legal advice, the scope of such situations must remain narrowly tailored.”).
- Be extremely selective when determining which privileged communications, if any, are sent to an external consultant. Even careful selection based on thoughtful analysis of the Bousamra standards may result in a waiver of the privilege.
- Establish confidentiality agreements with external consultants in advance of any potential disclosure. Given jurisdictional variation in the treatment of disclosures to consultants (especially PR consultants—see discussion above), consider specifying or modifying the law applicable to the agreement.
- The Bousamra decision did not address whether communications with internal company PR specialists or other internal consultants would lead to waiver. Counsel should not assume that status as an employee qualifies them to receive privileged information.
- In-house counsel and outside counsel should cooperate in determining who will retain outside consultants and what, if any, communications will be shared with them.