Protecting your privileges amid prospect of litigation

Many of you are familiar with the general concept of attorney-client privilege. In most cases, a lawyer may not be compelled to reveal information related to the representation of his client.

Additionally, the judicial system protects other forms of information from disclosure. For example, the work-product doctrine protects information prepared specifically in anticipation of litigation. Among other things, the work-product doctrine protects documents and other items that contain an attorney’s opinions, investigation notes and legal theories. Many of the things protected by the work-product doctrine have been prepared before a lawsuit has been filed. This often includes the work of consultants retained to help formulate defense theories and opinions.

In virtually every case my firm handles, we retain consultants familiar with industry practices. Unless we formally designate the consultant as an expert and potential trial witness, the non-testifying consultant’s work file and report is typically granted complete immunity under the work-product doctrine. In a limited number of situations, discovery of a non-testifying expert’s opinion may be available if the opposing party shows “exceptional circumstances” where it is impracticable to obtain the information any other way. Nonetheless, there is still a wide grant of protection.

What happens if a consultant is retained for litigation and designated as an expert, but the lawsuit settles and never goes to trial? If a new lawsuit is filed based on nearly the same facts and legal issues, should the expert’s reports, correspondence and other materials be protected in the new lawsuit? It might seem clear that the information should remain protected. Generally, it is assumed that documents prepared by non-testifying consultants as part of litigation are protected as work-product. However, in many cases, plaintiffs’ counsel attempts to chip away at this protection by arguing the information was prepared by an expert from the prior litigation and therefore discoverable in subsequent cases.

In Indiana, a 1987 case named American Buildings v. Kokomo Grain Co. Inc. held that the report of an expert prepared for prior litigation was discoverable in a subsequent case. In American Buildings, a grain storage building sold to Kokomo Grain Co. collapsed. American’s buildings had collapsed before, and American hired a consultant to analyze the cause of the collapse in its defense of previous litigation. American then designated the consultant as an expert, but the prior litigation settled or otherwise resolved. When Kokomo later sued American Buildings, it asked the court to order the production of the expert’s report.

The court held that since the consultant had been designated as an expert in the earlier litigation, his report was discoverable. Like the federal rule upon which it was modeled, the Indiana rule protecting the consultant’s report from discovery stated protection could be had when the individual did not expect to be called as a witness at trial. The court determined that since the earlier cases had been resolved, it was impossible for anyone to expect the expert to be called as a witness in a trial that would never happen.

Even though American Buildings has been criticized by scholars, the importance of the case should not be minimized. The American Buildings holding applied solely to reports of a designated expert prepared for earlier litigation. However, clever plaintiffs’ counsel will attempt to discover more than just the final report prepared by the expert. If the expert’s correspondence with the defense attorney or the documents he used to prepare the final report were susceptible to discovery by the opposition, the defense would be faced with enormous obstacles in its representation of a client.

If read incorrectly, the case provides a basis for substantial attacks on traditional privileges.

If you are confronted with the prospect of litigation, your attorney should be aware of the rules regarding expert discovery. Savvy defense counsel will recognize the arguments against reliance on cases such as American Buildings and ensure that privileged documents remain protected.