It is widely understood that communications between an attorney and his/her client are protected from disclosure under the attorney-client privilege. It should be equally understood that the attorney-client privilege is lost or waived if a third party is present for those communications. However, there is an exception to the latter rule: the common-interest doctrine.
The common-interest doctrine holds that a third party may be privy to an attorney-client privileged communication, and the privilege will stay intact, if the communication is made for the purpose of furthering a nearly identical legal interest shared by the client and the third party. Hyatt v. State Franchise Tax Bd., 105 A.D.3d 186, 205 (2d Dep’t 2013). Courts have interpreted the “furthering a nearly identical legal interest” portion of the doctrine to require that the communication be made in pending litigation or in reasonable anticipation of litigation where the client and third party have a common legal interest. Id., Aetna Cas. And Sur. Co. c. Certain Underwriters at Lloyd’s London, 176 Misc.2d 605 (N.Y. Sup. 1998), aff’d, 263 A.D.3d 367 (1stDep’t 1999).

In a recent decision dated October 16, 2013 from the New York County Supreme Court, the Court refused to expand the reach of the common interest doctrine to communications between two parties involved in a merger and one of the parties’ counsel. In Ambac Assur. Corp. v. Countrywide Home Loans, Inc., 2013 NY Slip Op 51673(U), the Court reviewed the determination of a Special Referee following a discovery dispute who decided not to extend attorney-client privilege protection over communications related to a merger between Countrywide Home Loans, Inc. (“Countrywide”), its counsel, and co-defendant Bank of America Corp. (“BOA”). Counsel for BOA sought to have the Special Referee’s determination vacated arguing that the common-interest doctrine should apply to the communications between Countrywide, BOA, and counsel.

However, the Court in Ambac, citing to Hyatt and various other cases applying New York law, held that the common-interest doctrine extends only to situations where there is, at minimum, a reasonable anticipation of litigation. While the Court observed that the common-interest doctrine would also apply to a situation where there was dual representation– i.e. if Countrywide and BOA were represented by the same counsel – this was not the situation here. In addition, although the Court did note that at least one federal court elsewhere in the country had found that communications made after a merger agreement was signed did fall within the common-interest doctrine, no New York cases had expanded the doctrine to that extent.

Based on this decision, it would certainly be wise for attorneys and clients alike to take extra caution when communicating to make sure that the all-important attorney-client privilege remains in place.

Special Note for Commercial Litigators

The New York State Courts website now allows you to specifically search for decisions from the Commercial Division, whether in an appellate court or one of the lower courts. If you want to search the Commercial Division decision database, simply go to Once on the site, select Commercial Division at the bottom of the drop down list that appears in the “Search by Court” field of the Advanced Search form. From there, you can type search terms into the “Search Full Text” field (at the bottom of the Advanced Search form) and hit Enter or click Find. This database is a great way to stay on top of recent case law affecting commercial litigators.