CYBER - EQUIVALENT TO LEAVING A CLAIM FILE ON A BENCH IN A PUBLIC SQUARE

The U.S. District Court Western District of Virginia Abingdon Division recently decided that an insurance company had waived attorney client privilege when an investigation placed materials on a public drop box type of site, that was not password protected.  An excerpt from the case follows: Excerpt In an effort to share information electronically, Thomas Cesario, a Senior Investigator for Nationwide Insurance Company, (“Nationwide”), which owns Harleysville, uploaded video surveillance footage of the fire loss scene, (“Video”), onto an internet-based electronic file sharing service operated by Box, Inc. Cesario then sent an email containing a hyperlink to the Box, Inc., internet site, (“Box Site”), by which Wes Rowe of the National Insurance Crime Bureau, (“NICB”), could access the file containing the Video using the internet and download the Video. The Video was placed on the Box Site, and the hyperlink to the Box Site sent by email to Rowe on September 22, 2015. The email to Rowe stated: “Here is the link to access the video” and provided the hyperlink. The email also contained the following statement:Harleysville concedes that any person who used the hyperlink to access the Box Site had access to the electronic information stored there. The information was not password protected. Harleysville also concedes that any person who had access to the internet could have accessed the Box Site by simply typing in the url address in a web browser.Based on these facts, I find that Harleysville has waived any claim of attorney-client privilege with regard to the information posted to the Box Site. It has conceded that the Box Site was not password protected and that the information uploaded to this site was available for viewing by anyone, anywhere who was connected to the internet and happened upon the site by use of the hyperlink or otherwise. In essence, Harleysville has conceded that its actions were the cyber world equivalent of leaving its claims file on a bench in the public square and telling its counsel where they could find it. It is hard to image an act that would be more contrary to protecting the confidentiality of information than to post that information to the world wide web.  The moral of this story for Condominiums?  Protect attorney-client communications.  While Boards, managers and attorneys now use Dropbox type sites in connection with large cases and discovery requests, the parties need to ensure that these exchanges and sites are password protected in order to prevent loss of attorney-client privilege.  If a Board loses its attorney-client privilege, it might as well deliver the privileged documents and information to the other side.To read the Memorandum Opinion on Harleysville Insurance v. Holding Funeral Home, Inc. [click here].