Insured/Insurer Privilege: Can you Tell Your Insurer Your Deepest Secrets?

1. Insured/Insurer Privilege:Can you Tell Your Insurer Your Deepest Secrets? Peter Laun, Jones Day (pdlaun@joneday.com) Ash Kilada, PepsiCo (a.Kilada@pepsico.com)

2. Presentation Goals • Learn about different types of privileges • Understand how privileges operate • Understand risks surrounding disclosing privileged information • Understand privilege issues raised by use of claim consultants and experts

3. Privilege Basics • Long recognition of attorney-client privilege in US and most foreign courts • Exception to general rule of discoverability of a broad range of information • Widely accepted, but overly broad privilege claims disfavored by courts • Cover all types of communications (written, oral, etc.)

4. Types of Privilege • Attorney-Client • Work Product/MPL/Litigation Privilege • Common interest/joint defense (exception to waiver doctrine) • Factual information vs. legal advice

5. Waiver of Privilege How does it occur? • Disclosure to third parties • Affirmative use by policyholder Who are third parties for waiver purpose? • Broker? • Insurer? • Insurer’s counsel? What are the consequences of waiver? What is the possible scope of waiver?

6. Common Interest Privilegein the Insurance Context Basic situation: • Policy holder discloses privileged information to insurer as part of defense effort • Insurer requests and receives privileged information as part of defense effort • Types of materials at issue: lawyer work-product such as factual summaries, legal memoranda, litigation risk analyses

7. Common Interest Privilegein the Insurance Context When does it apply? When may it not apply? • Denial of coverage • Reservation of rights What does it apply to? • Factual information? • Liability assessments by counsel • Settlement strategy?

8. Common Interest Privilegein the Insurance Context If it applies, what protection does if afford? • As to third parties • Between policyholder and insurer

9. Is a Policyholder Required to Share Privileged Information With Its Insurer? • Arguments for requirement • Arguments against requirement • Risks of sharing and not sharing information

10. Policyholder Must Make AConscious Decision About Sharing Privileged Information • What to share? • Can it share some but not all information?

11. Risks of Sharing Information • Use in later coverage litigation (e.g., Waste Management case) • Throwing open company files in coverage litigation–scope may be broader than wished • Can privileged information effectively be protected in coverage litigation?

12. Ways to Protect Privileged Information • Written common interest agreement (required in some jurisdictions) • Key elements to cover in agreement 1. Confidential/privileged information 2. Non-use

13. Common Privilege Conflicts and Problems • Counsel writes positive analysis of claim; view changes over time • Counsel advice conflicts with insured’s position • Insurer disagrees with counsel’s position

14. Privilege/Expert Issues • Variations between Federal Court and State Courts • In some jurisdictions, entire file may be discoverable – think about file separation between consulting and testifying • Need to think about sharing expert with insurer – advantages and perils

15. Questions & Answers