Second Time is a Charm: On Further Review of Issue Pennsylvania Supreme Court Finds Attorney-Client Communications Operates as a Two Way Street to Protect Communications Between Attorneys and Clients

By: Daniel S. Strick

            Prior to the Supreme Court’s recent decision in Gillard v. AIG Insurance Co.,  2011 Pa. LEXIS 393 (2011), Pennsylvania courts had been inconsistent in expressing the scope of the attorney-client privilege.   The courts wrestled with the competing interests of the encouragement of trust and candid communication between lawyers and their clients and the accessibility of material evidence to further the truth-determining process.  The Pennsylvania Supreme Court has now determined the privilege is applicable as a two-way street bringing the law in accord with the law in just about every other jurisdiction.

            Last January, the Pennsylvania Supreme Court Justices could not agree on the scope of the attorney-client privilege in the matter of Nationwide Mutual Insurance Company v. Fleming, 2010 Pa. LEXIS 40 (Jan. 29, 2010).  Due to retirements and recusals, only four justices heard the case.  A two-two split resulted with the Superior Court’s decision affirmed, even though none of the Justices agreed with the rationale provided by the Superior Court.  Thus, leaving the scope of the attorney-client privilege in a state of flux.

            Gillard involved allegations of bad faith by the insurance company in the handling of Gillard’s uninsured motorist claim.  During discovery, Gillard sought production of all documents from the file of the law firm representing AIG in the underlying litigation.  AIG withheld and redacted documents created by counsel, asserting the attorney-client privilege.  In response, Gillard sought to compel production asserting the position the attorney-client privilege in Pennsylvania is very limited and only protects confidential communications initiated by the client.  Gillard asserted certain lawyer-initiated communications might contain information originating with the client which would then be privileged.  However, AIG had not sought such limited protection and instead asserted the privilege broadly as if it were a “two-way street” and not as a “one-way street” as set forth in 42 Pa.C.S. §5928. 

            AIG asserted the privilege’s purpose is to foster the free and open exchange of relevant information between lawyer and client.  To encourage such candid disclosure, AIG argued both client and attorney initiated communications must be protected.

            The trial court performed an in camera review and adopted the “one-way street” perspective.  AIG filed an interlocutory appeal and the Superior Court exercised jurisdiction and affirmed relying on Nationwide.  Specifically, the Superior Court found the privilege as being “strictly limited” and attorney to client communications were only protected to the extent they reveal confidential communications previously made by the client to counsel for the purposes of obtaining legal advice.