06/01/2010
Preservation of the Attorney-Client Privilege and the Work Product Doctrine in Bankruptcy (Norton Journal of Bankruptcy Law and Practice)
I. Introduction
The attorney-client privilege is the oldest of the recognized commonlaw privileges protecting communications. It serves "to encourage full and frank communication between attorneys and their clients" and thereby promotes broader public interest in the observance of law and administration of justice. Such open communication is necessary to ensure that attorneys have the relevant information to consider when offering a client legal advice. The public policy rationale behind the attorney- client privilege must, however, be balanced against the competing interest of the fair administration of justice through the production of relevant evidence. Accordingly, most courts have construed the various evidentiary privileges, including the attorney-client privilege, narrowly in order to curtail the exclusion of evidence.
The attorney-client privilege applies to corporations as well as individuals. Much like the attorney-client privilege which remains in effect beyond the death of an individual client,5 it similarly persists into the bankruptcy proceedings of a corporation. The public policy goal of open and frank communication with attorneys is equally relevant in the bankruptcy context as elsewhere. In the ever-changing bankruptcy landscape where the roles of various stakeholders can change drastically throughout a case, attorney-client privilege issues are particularly complicated. Failed negotiations among stakeholders can lead to protracted litigation, which can last years beyond the confirmation of a plan of liquidation or reorganization. In many cases, litigation trusts are created for the prosecution of residual claims maintained by the estate. In this residual litigation, complicated attorney-client privilege issues may arise surrounding the various parties that were active during the pendency of the bankruptcy case.
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This article first appeared in the Norton Journal of Bankruptcy Law and Practice, Vol. 19, No. 3 (June 2010), published by West, a Thomson Reuters business, and the copyrighted article is posted with the permission of the copyright holder, West Services, Inc.