PRIVILEGES AND CONFIDENCES – ATTORNEY/CLIENT

Published on: January 12, 2016

One of the hallmarks of a healthy association is the free and open exchange of information between and among the board and unit owners.  There are few things which create more dissension or frustration in an association then poor or non-existent communications from the board.  However, there is a legitimate need for a board to maintain certain confidences, most importantly in connection with seeking advice and direction from its legal counsel.  Managing the tension between open communications and preserving confidences can be complicated both technically and practically.  But there are some general procedures and approaches which can help to preserve balance while, at the same time, increase the likelihood that confidential communications remain shielded.

The Privilege Most people are aware that, generally, communications between lawyer and client are privileged and confidential.  The idea is that clients and lawyers need the ability to honestly discuss the facts and the law relevant to the issues at hand so that the lawyer can properly advise the client.  If either had to be concerned that what was said in consultation could be disclosed to third parties – or even to adversaries – it would likely chill the open dialogue between lawyer and client.

Preserving Privilege

The attorney-client privilege is not absolute and clients have to be careful not to waive privilege through their own actions.  One of the ways a board can waive privilege is by sharing confidential communications with people who are not on the board or otherwise within the narrow class of persons to whom the privilege attaches.  Board members should be careful not to disclose what counsel “said” or “thinks” about a particular issue with anyone other than another board member or a duly appointed managing agent.

Communicate about the Inability to Communicate

It is essential that board’s explain, or have their counsel explain, to the unit owners the reasons that certain confidential communications between the board’s lawyer and the board will not be shared.  Unit owners sometimes think of the board’s lawyer as “their” lawyer and do not intuitively appreciate the need to maintain communications with trust counsel as confidential.  The reality is that if confidential communications between trust counsel and the board were shared with the unit owners generally, the privilege would be waived and adversary parties could obtain that confidential information.  In my experience, when unit owners are told the board’s goal is not to keep information from them, but to keep it out of the hands of the association’s adversaries, most unit owners understand.

Executive Session

Ideally any oral communication between or among board members in which information provided by counsel is discussed should occur in an executive session.  While a communication between or among board members outside of executive session should not be viewed as waiving privilege, communications which occur in executive session will be easier to protect.  Emergencies and other practical realities may prevent executive session communication, but it should be the approach whenever possible.

A board should not create minutes of executive session discussions.  If a board wants to create a record of the discussions it had in executive session about what counsel said or thinks – or otherwise – they should send an e-mail to counsel updating counsel on the board’s deliberations at the meeting.  The e-mail will be attorney-client privileged and therefore protected while at the same time keeping counsel apprised of developments and creating a readily accessible record of goings-on at the executive session.

E-mails

The subject of e-mail communication – and its potential adverse consequences – might merit an entire article.  As regards privilege issues, the rule is that a board should never put a description of what counsel “said” or “thinks” or words of similar meaning in an e-mail communication unless it is in an e-mail to counsel.  While e-mails between and among board members which discuss legal communications should be treated by courts as confidential, courts may vary in the degree of protection afforded such e-mails.   E-mails from client to counsel have a high likelihood of being treated as privileged.  An e-mail from a board member to counsel confirming counsel’s position and prior statements and cc’d to the remaining board members has a much higher likelihood of remaining protected while at the same time allowing board members to share information among themselves.

Admittedly, there will be times when boards wish to discuss what a lawyer said without including counsel in the discussion.   It is best practice to have those communications orally so as to decrease the likelihood that a written record of such communication later comes into the possession of an adversary party.

Over-Share Non-Privileged Information

The board should take every opportunity to share with the unit owners non-privileged information relating to counsel’s representation.  It is a mistake for a board to become protective of all information which relates to a matter being addressed by counsel as often times a unit owner’s concern can be addressed by information which is publicly available.  For instance, association counsel may have communicated to the board her analysis of an association’s claims against the developer.  Such communication could not be disclosed to the unit owners while preserving privilege.  However, counsel may have also sent a demand letter to the developer detailing the board’s claims against the developer.  Providing the unit owners with a copy of that public demand letter will not waive any privilege but may provide the unit owners with all the information they need to feel informed and up to date.  The board should always keep in mind that the goal is not to deprive the unit owners of information, but to prevent privileged information from coming into the possession of the board’s adversaries.  Therefore, at every opportunity, the Board should share publicly available information about the scope and substance of counsel’s representation with the unit owners.

The value of accurate information could never be overstated.  In a condominium association sharing information should be highly prized but there are times when protecting information is be equally important.  The task is twofold (1) to identify the information which can be shared and to effectively communicate that information and (2) to identify information which should not be shared and to develop practices and approaches designed to protect such information.  With some attention, and a little effort, a workable balance can be established in any community association.

For more information regarding this article contact Tom Moriarty at tmoriarty@meeb.com.