Can Transaction Parties Rely on the Common Interest Privilege?

In many situations, parties to a transaction want to share legal advice among themselves. Parties whose interests are aligned can save money by sharing and discussing these opinions because they won’t need to get their own separate opinions. The question arises: Can they assume their communications are protected by the so-called “common interest privilege?” The answer is “perhaps.”

The common interest doctrine extends attorney-client privilege to any privileged communication confidentially shared with another represented party’s counsel for the purpose of furthering a common legal interest. Although it’s recognized by federal and many state courts, the limits vary, and in some state jurisdictions it continues to evolve. There is also lack of consistency across federal courts. Attempts to incorporate a common interest privilege into the Federal Rules of Evidence have been unsuccessful, leaving decisions in the hands of district court judges.

If litigation is not pending or imminent, parties can increase the likelihood that the common interest doctrine will protect communications by memorializing their intentions in an agreement that is specific about the intended application of the privilege, the common interest implicated, and their intention to keep privileged communications confidential; by identifying which documents are subject to the common interest privilege and labeling them accordingly; by separating communications regarding legal advice and strategy from those regarding purely business or financial decisions; and by maintaining the confidentiality of communications over which the privilege is asserted.