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Federal Courts Law Review

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FEDERAL COURTS LAW REVIEW -- 2006 Fed. Cts. L. Rev. 6

SAILING ON CONFUSED SEAS:
PRIVILEGE WAIVER AND THE NEW FEDERAL RULES OF CIVIL PROCEDURE

By John M. Facciola

Abstract

Because so much information can be stored in a computer's memory, a review of a client's electronic records for discovery purposes can result in staggering costs and the inadvertent disclosure of privileged material. While lawyers have created two kinds of agreements they hope will reduce the costs of such review and prevent any claim that their actions constitute a waiver of any privilege by their clients, the new Federal Rules of Civil Procedure neither prohibit nor authorize such agreements and grant only limited relief to the party who has produced privileged material and seeks its return. Moreover, agreements between counsel as to privilege waiver cannot bind third parties. In one significant decision, a magistrate judge concluded that, in certain circumstances, parties to such a court-approved agreement will be protected from claims by third parties that the agreement constitutes a waiver of any privilege. That decision generated a proposal to enact a new Federal Rule of Evidence that achieves the same result. Without such a rule, the costs of privilege review will remain high, unless there is either new technology that could segregate privileged material from other information at its creation or American businesses adopt and enforce reasonable and well-articulated policies requiring their employees to maintain privileged material separate from all other electronic records.

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