An Overlooked Exception To Attorney-Client Privilege

It’s based on a 45-year old Fifth Circuit precedent – Garner v. Wolfinbarger – a precedent that’s alive and well in Delaware, among other venues, and most recently in a New York State appellate court. The fiduciary exception, explains a post from Proskauer Rose, comes into play when shareholders want to pierce the privilege shield on the grounds that the attorney advice in question was in essence advice to them, because the managers who received it were acting as shareholder fiduciaries. Per Garner, nine “good cause” factors must be present for the exception to come into play. They range from the quantifiable – the number of shareholders and the percentage of stock they represent – to the more subjective and potentially arguable: the extent to which the shareholder litigants are “blindly fishing.”