April 2017 | Earn one hour of MCLE Credit in Legal Ethics
Navigating the self-defense exception to attorney-client privilege
It's tempting for attorneys to use the arsenal of information about a former client they may have at their fingertips when faced with an accusation of malpractice or unpaid attorney fees. But much of this information is likely privileged or confidential and cannot be freely used simply because a client dispute arises. Knowing the ethical bounds of the ability to use such information is critical to ensuring those bounds are not crossed.
An attorney's duty of confidentiality is a core aspect of the attorney-client relationship. The duty imposes on the attorney an obligation to "maintain inviolate the confidence, and at every peril to himself or herself to preserve the secrets, of his or her client." Cal. Bus. & Prof. Code § 6068(e)(1); see also Flatt v. Superior Court (1994) 9 Cal. 4th 275, 289. Revelation of such information is also prohibited by Rule 1-300 of the Rules of Professional Conduct. Secrets in this context include "information obtained by the lawyer during the professional relationship, or relating to the representation, which the client has requested to be inviolate or the disclosure of which might be embarrassing or detrimental to the client." COPRAC Form. Opn. 1993-133.
Confidential information includes communications between the attorney and client that are privileged under Evidence Code § 954, but protects a much broader scope of information than the more narrow privilege. Unlike the attorney-client privilege, for example, confidential information may not be revealed regardless of the source of the information. "The principle of client-lawyer confidentiality applies to information relating to the representation, whatever its source, and encompasses matters communicated in confidence by the client, and therefore protected by the attorney-client privilege, matters protected by the work product doctrine, and matters protected under ethical standards of confidentiality, all as established in law, rule and policy." Cal. Rules of Prof'l Conduct, Rule 3-100, comment 2. Also unlike attorney-client privileged communications, where the presence of a third party may destroy the privilege, confidential information may include any information acquired during the course of the representation, even if that information is publicly available or revealed to others. See COPRAC Form. Opn. 2016-195; Matter of Johnson, 4 Cal. State Bar Ct. Rptr. 179, 189 (Rev. Dep't 2000).
Thus, the vast majority of information an attorney acquires relating to a client's representation is confidential and cannot be disclosed by the attorney without the client's consent. An attorney's duty of confidentiality survives the termination of the attorney-client relationship. See Wutchumna Water Co. v. Bailey (1932) 216 Cal. 564, 571. When a former client accuses an attorney of malpractice or refuses to pay the attorney's fees, however, is the attorney still bound by the duty of confidentiality? The answer is "generally, yes," with an important exception provided by Evidence Code § 958.
The self-defense exception
Evidence Code § 958 provides: "There is no [attorney-client] privilege . . . as to a communication relevant to an issue of breach, by the lawyer or by the client, of a duty arising out of the lawyer-client relationship." There is no similar exception to the broader duty of confidentiality imposed by § 6068(e)(1) of the State Bar Act and Rule 1-300 of the Rules of Professional Conduct. The discussion following Rule 3-100, however, states that the Rule prohibits disclosure "except . . . as authorized or required by the State Bar Act, these rules, or other law." (Emphasis added). Evidence Code § 958 may fall within this "other law" authorization. At least one court has held that the apparently absolute obligation imposed by Bus. & Prof. Code § 6068(e) to maintain client confidentiality is "modified by the exceptions to the attorney-client privilege contained in the Evidence Code." Fox Searchlight Pictures, Inc. v. Paladino (2001) 89 Cal.App.4th 294, 313; see also Los Angeles Bar Ass'n Formal Opns. 452 (1988) and 498 (1999). Although Fox Searchlight relies for that proposition on Matter of Lilly (1993) 2 Cal. State Bar Ct. Rptr. 473, a case not so holding, as a practical matter, it would seem the Evidence Code § 958 exception must be interpreted to apply to confidential as well as privileged information in order to fulfill the statute's intended purpose.
That purpose is to prevent the injustice that would result if a client was permitted to accuse an attorney of wrongdoing or refuse to pay the attorney's fee, and then assert privilege to prohibit the attorney from defending or prosecuting a claim. See Law Rev. Comm'n Comment § 958; Carlson, Collins, Gordon & Bold v. Banducci (1967) 257 Cal.App.2d 212, 228.
Despite its broad terms, however, the exception to privilege provided by Evidence Code § 958 has several important limitations. First, the exception only applies in the context of formal proceedings to which the Rules of Evidence would otherwise apply. See Cal. Evid. Code §§ 901-903 and 910. So, for example, a negative online review by a client or refusal to pay a bill (without proceedings filed to collect the fee), does not trigger Evidence Code § 958 and client confidentiality must be maintained in formulating any response. See L.A. County Bar Ass'n Form. Opn. 525; Bar Ass'n of San Fran. Form. Opn. 2014-1. The exception may also apply where necessary to protect an attorney's rights to a fee award in pending proceedings. See, e.g., In re Dimas, LLC, 357 Bankr. R. 563 (N.D. Cal. Bankr. 2006) (debtor's counsel could reveal under Evidence Code § 958 otherwise confidential attorney-client communications in response to client representative's objections to counsel's fee application).
Second, the exception only permits otherwise privileged or confidential information to be used or revealed to the extent necessary to respond to an issue raised by the dispute. Los Angeles Bar Ass'n Formal Opn. 498 (1999); McDermott, Will & Emery v. Superior Court (2000) 83 Cal.App.4th 378, 383-84. Section 958 "is not a general client-litigant exception allowing disclosure of any privileged communication simply because it is raised in litigation." Brockaway v. State Bar (1991) 53 Cal.3d 51, 63 (emphasis in original). In Dixon (Claude) v. State Bar (1982) 32 Cal.3d 728, for example, an attorney was disciplined for including in a declaration filed in an action against the attorney a gratuitous statement about a suspected affair of the client's husband "irrelevant to any issues then pending before the court." Id. at 735. "‘If a disclosure of the communication is not essential to preserve the rights of the attorney, it continues to be privileged; and counsel should not, in any event, disclose more than is necessary.'" In re Dixon (Kathryn), No. 94-0-12203, 1999 WL 562767, at *21 (Cal. Bar Ct. Mar. 15, 1999) (quoting 81 Am.Jur.2d, Witnesses, § sec. 400, p. 360).
Third, the exception to privilege only applies to the proceedings in which the issue of breach is raised. The information remains privileged and confidential for all other purposes and in all other contexts, outside of the proceeding in which lawyer or client is alleged to have breached a duty. See, e.g., Gerawan Farming, Inc. v. Townsend & Townsend & Crew LLP, No. 1:10-CV-02011 LJO JL, 2011 WL 4440188, at *1-2 (E.D. Cal. Sept. 23, 2011) ("Therefore, though each Defendant is free to use communications each had with Plaintiff that were privileged until this litigation was filed to defend themselves in this matter—as long as these communications are relevant to the issues raised here—they are not free to disclose these communications outside of these proceedings."). In In re Dixon (Kathryn), for example, an attorney sued for malpractice was disciplined for providing confidential information to her former client's adversary in the case in which the attorney was replaced as counsel. The fact that the attorney had been sued did not entitle the attorney to reveal confidential information for any purpose other than defending the client's claim, such as to "aid in defeating her former client's claim against third persons." In re Dixon (Kathryn), No. 94-0-12203, 1999 WL 562767, at *21-22 (Cal. Bar Ct. Mar. 15, 1999).
Fourth, the exception applies only to communications between the client and the lawyer involved in the claim of breach. Communications between the former client and other counsel, for example, remain privileged, even if those communications are relevant to a defendant lawyer's statute of limitations defense. See Miller v. Superior Court (1980) 111 Cal.App.3d 390, 393-95 (consultations with other counsel after attorney's alleged malpractice occurred remain privileged). The same is true in cases brought against an attorney by a third party: no exception to the duty to preserve client confidences applies. See Dietz v. Meisenheimer & Herron (2009) 177 Cal.App.4th 771, 786. Communications between the former client and the attorney handling a malpractice case likewise remain privileged, even though those communications would likely be relevant to issues of the defendant attorney's breach. See Schlumberger Ltd. v. Superior Court (1981) 115 Cal.App.3d 386, 392. Similarly, a former client cannot invoke the exception to discover communications between an accused lawyer and the lawyer's other clients, even where the former client accuses the lawyer of improperly representing those clients adverse to the interests of the former client. Glade v. Superior Court (1978) 76 Cal.App.3d 738, 746-47. That is not the case, however, with former joint clients. Where clients were jointly represented by the same lawyer in the same legal matter and only one of the joint clients sues the lawyer for malpractice, the exception does apply and the non-suing joint client cannot prevent disclosure of otherwise privileged or confidential information relevant to the lawyer's alleged breach of duty. See Anten v. Superior Court (2015) 233 Cal.App.4th 1254, 1257.
Finally, context matters. For example, confidential information concerning the reasons for an attorney's withdrawal generally may not properly be revealed when the attorney is seeking permission to withdraw from a case (see COPRAC Form. Opn. 2015-192), but that same information may be revealed in the context of a later fee dispute, if relevant to that dispute and "reasonably necessary due to an issue raised by the client." Los Angeles Bar Ass'n Form. Opn. 498 (1999).
After the breach is resolved
Although some cases describe Evidence Code § 958 as a "waiver" of the attorney-client privilege by a client who sues an attorney for malpractice (see, e.g, McDermott Will & Emery v. Superior Court (2000) 83 Cal.App.4th 378, 383-84), in fact, Evidence Code § 958 provides an exception to privilege, not a waiver. There simply is no privilege as to communications relevant to an issue of breach between lawyer and client in an action between them. When that action is over, then, does the information disclosed in the action resume its privileged or confidential status?
In the context of criminal actions, courts have held that the exception to the attorney-client privilege provided by § 958 does not apply after the proceedings which invoked the exception have been resolved. As the court held in In re Miranda (2008) 43 Cal.4th 541, "in filing his previous habeas corpus petition alleging ineffective assistance of counsel, petitioner did not waive the privilege, he merely triggered an exception to it that is not applicable in future proceedings." Id. at 555 (emphasis in original); see also People v. Ledesma (2006) 39 Cal.4th 641, 695, 47. That reasoning would appear to apply equally in the civil context, although no case has as yet expressly so held.
To review the bidding: Evidence Code § 958 provides an exception to, and not waiver of, privilege, the exception applies only in the case involving breach between the lawyer and the client, and an attorney's obligation to otherwise maintain inviolate a client's confidential information is stringent. Given these considerations, an attorney should not feel free after a malpractice or fee litigation is concluded to use or disclose the otherwise privileged or confidential client information used in that case in any other context.
While an evidentiary exception to the attorney-client privilege permits disclosure of otherwise attorney-client privileged and also, probably, confidential, information, the exception is limited. Attorneys disclosing such information to defend or prosecute a client claim outside the exception's limits could face disciplinary or civil liability and should, accordingly, proceed cautiously.
Suzanne Burke Spencer is the managing shareholder of Sall Spencer Callas & Krueger ALC, in Laguna Beach, where she focuses her practice on business litigation, legal malpractice, attorney fee disputes and legal ethics. She is the current chairwoman of the State Bar of California's Standing Committee on Professional Responsibility and Conduct. The views expressed herein are her own.