THE ALPS RISK MANAGEMENT REPORT
Inadvertent Disclosure of Confidential Client Information

By Robert W. Martin, Jr., Esq.

You are minding your own business and all of a sudden, your fax machine whirs to life. Moments later, you have in your hands the other side's theory of the case, all their perceived evidentiary problems and a proposed bottom-line settlement position which is much higher than any offer transmitted to you to date. What do you do?

When I posed a similar scenario to a group of attorneys at a CLE that I taught earlier this year, one or two in the audience were somewhat indignant that there was even a question about what to do. They felt very strongly that there was only one thing to do; stop reading it as soon as you reasonably know it was not intended for your eyes and immediately return the document(s) to the sender. Indeed, a fair number of attendees thought that such a course of action was the only "correct" thing to do.

Unfortunately, they may be correct morally and "civilly" but legally the answer is not so clear. Courts, state ethics panels and the ABA all have wrestled with this problem.

For example, citing the ABA Committee on Ethics and Professional Responsibility, Formal Op.94-382(1994), noted Legal Ethics Professor John Burman of the University of Wyoming College of Law recently stated in The Wyoming Lawyer (February 2000 at 17): "A lawyer who receives materials from an adverse party which the lawyer knows to be privileged or confidential has important ethical obligations. The lawyer should: 1) refrain from reviewing the material[s] except to the extent necessary to determine their character; 2) notify his or her adversary's lawyer of the receipt of materials; 3) follow the other lawyer's instructions about the disposition of the materials; and 4) not use the materials against the sending party unless authorized to do so by the appropriate court."

Most importantly, Professor Burman went on to say in the very next paragraph, "[T]he committee stopped short of imposing an absolute rule that a lawyer who receives confidential material must immediately return it to the other party. Instead, promptly notifying the other party's lawyer allows each party's reasonable and timely opportunity to resort to judicial remedies to determine legal rights and allow the receiving lawyer, under appropriate circumstances, to use relevant materials in the prosecution or defense of an action on behalf of her client.' Courts faced with such issues have reacted differently."

In Amgen Inc. v. Hoechst Marion Roussel Inc., D.Mass., Civ No. 97-10814-WGY, 1/18/00, privileged material was inadvertently given to the other side and they refused to return it. The Court noted that the other courts have taken three distinctly different approaches to the question of what happens when there has been an inadvertent disclosure of privileged information. The three approaches were delineated as follows: 1) a negligent disclosure can "never waive" the privilege, 2) negligent disclosure "always" results in a waiver; and 3) the so called "middle approach" which makes the facts surrounding the waiver and other circumstances (i.e., a fact intensive approach). The Court there criticized both the first and the second approaches and chose to look at all the facts.

In the Amgen case, a paralegal mistakenly provided to an outside copy vendor both the non-privileged and privileged boxes of material for copying. The Court found that the law firm had taken inadequate precautions to prevent inadvertent disclosure and that, for example, an attorney should have been assigned to review the copy vendor's performance. The Court went on to find that since it was not until the other side notified the negligent producer of the possible inadvertent disclosure, implying that the producer had an obligation to double check its production, the producer's action was "grossly negligent."

Given the number of reported cases and the far-ranging nature of the decisions, it would not be prudent for any attorney to assume that an inadvertent disclosure will be immediately returned. It would also be unrealistic to think that everyone will be as "nice" about it as those attorneys who expressed quiet indignation at any other possible approach during my CLE presentation. Moreover, some of those attorneys who decide not to return the misdirected communication are doing so for very legitimate reasons. Remember that Model Rule 1.3 requires vigorous representation of your client. Indeed, in Op.256 (1995), the District of Columbia Bar Legal Ethics Committee recognized that competing interests of the recipient of a misdirected communication. In that Opinion, the Committee stated that they would immunize an District of Columbia attorney against an ethics complaint filed against him/her by a client regarding the attorney returning a misdirected communication. Very importantly, however, they also noted that they have no ability to immunize the attorney who so returns the misdirected communication against a malpractice claim.

The lesson to be learned is to take the appropriate amount of time to ensure that communications from your office are not misdirected. Make sure your staff has the time and the inclination to double-check communications to make they are not misdirected, and that they ask for clarification when there is any question of the intended addresses. There is no clearly right or wrong answer as to whether you should or should not return the misdirected document. However, that is a better dilemma to face than being in a position of having to explain to your client how the other side obtained possession of their confidential information.