Whether in corporate transactions, litigation or business disputes, there may be situations in which multiple separate entities seek to enter into a formal relationship to protect their shared interests, even when represented by separate attorneys. If these entities are co-defendants to an ongoing litigation, they may wish to document the joint defense they share and their intent not to waive attorney-client privilege by sharing strategies and resources. For entities who are not involved in litigation, but who share an interest in a legal issue (such as negotiating a transaction or an ongoing lobbying interest), they may desire to document their common interest.

These scenarios are common, but require navigation to ensure effective communication without jeopardizing any legal privileges or immunities. The specifics of joint defense and common interest privileges can vary significantly across jurisdictions, both at the state and federal levels. Some jurisdictions acknowledge these privileges as one and the same, while others see them as different. Despite these differences, lawyers have consistently and successfully employed the use of formal agreements to establish reasonable parameters that courts typically approve of.

Joint Defense vs. Common Interest Privileges

To ensure the maximum protection for communications among aligned clients, it is helpful to review how courts treat joint defense and common interest privileges. By determining what type of privilege may apply to a legal representation, a lawyer can take steps to adequately prepare and protect their client’s interests.

A joint defense typically arises in the litigation context where co-defendants work together to defeat claims and share aligned legal interests. In furtherance of their efforts, the aligned parties typically share confidential information, documents, and strategies that would otherwise be protected by attorney-client privilege. The joint defense privilege shields these communications from disclosure to opposing parties, thereby allowing for collaborative defense efforts.

Although it is commonly referred to as a joint defense “privilege,” this concept is more like an exception to the rule of waiver. To maintain the privilege in sharing communications with others, a party must typically show three things: that the communications were made pursuant to a joint defense, that the communications were made to further the goals of that joint defense, and that the privilege was not otherwise waived (i.e., that the joint defenders are not sharing the communications beyond their limited group). A joint defense can also lend itself to practical application in sharing strategies and costs associated with expert witnesses, discovery fees, and other litigation expenses.

A joint defense relationship anticipates that the participants will safeguard privileged information from strangers to that relationship, but the privilege may not apply in any subsequent disputes among the joint defense participants.

On the other hand, the common interest privilege typically does not require litigation. Instead, the privilege contemplates scenarios where parties share legal strategies and discussions among parties with mutual legal interests, such as in regulatory inquiries or transactional negotiations.

Similar to the requirements for maintaining a joint defense privilege, the common interest privilege also requires that there be an actual common legal interest sufficient to warrant an exception to the waiver rules for the attorney-client privilege. A shared business or commercial interest may not suffice. Indeed, courts have rejected claims for a common interest privilege from parties whose interests were largely financial or commercial in nature.

Confirm the Nature of the Relationship

Most courts and jurisdictions do not require a formal agreement for the protections of a joint defense or common interest relationship to apply, but adopting such an agreement that clearly articulates the shared legal interest can help avoid any doubt as to the protections afforded by the joint relationship.

An agreement can document the scope, duration, boundaries and parties to a joint defense relationship. Because a common interest relationship typically arises in a non-litigation context, it can also support the parties’ interest to document the inception, duration, scope, and termination of any common interest agreement. The agreement can also document the purpose of the common interest, such as closing a business transaction, and limit the terms of the agreement to the completion of that purpose.

Such an agreement can help establish and preserve the privilege in case of disputes or challenges. For example, courts may occasionally inquire into whether co-parties’ interests are truly aligned. An agreement can serve as evidence to rebut scrutiny into the relationship.

Address Conflict of Interests

When parties with diverse legal strategies and separate legal teams collaborate pursuant to these privileges, it behooves the parties to consider whether conflicts could arise to undermine the shared defense or legal strategy. Sometimes parties will specifically document what to do in the event a conflict of interest or a deviation in preferred strategy arises between co-parties.

It is not uncommon for parties to disagree over certain aspects of a joint defense or common interest—or to have unique approaches to legal issues that arise during the course of the relationship. An agreement among the parties can confirm that, even if certain parties deviate from or leave the protected relationship, the group intends to maintain the privilege and protection for communications shared prior to any schism.

Another consideration is whether to document that attorneys servicing members of a joint defense or common interest arrangement do not owe legal duties to non-clients. Although those attorneys are committed to maintaining the privilege and taking steps to keep those protections in tact, it is generally understood that those attorneys do not owe duties to each others’ clients, absent a stated intention to do so. For that reason, many agreements documenting these types of relationships confirm that the existence of a joint defense or common interest arrangement shall not serve as a basis for one client to later seek to disqualify another’s counsel in a subsequent engagement.

Ultimately, joint defense and common interest agreements serve as powerful tools for clients and their attorneys to strengthen collaborative efforts, reduce costs, and protect sensitive legal information. By understanding and adhering to the nuances of these privileges, legal teams can navigate complex scenarios with greater confidence and strategic clarity.