Law360 published an article from Bass, Berry & Sims attorneys Tatjana Paterno, Britt Latham and Alex Agee discussing risks related to preserving information typically protected by attorney-client privilege when using representations and warranties insurance (RWI) in mergers and acquisitions transactions.

RWI policyholders are often asked to provide documentation to insurance companies that may include information protected by attorney-client privilege. This can occur either during the underwriting stage when the insurer requests information related to the transaction and the due diligence conducted by the buyer, and/or when a claim arises compelling the insurer to ask for privileged information regarding the counsel’s investigation, prosecution or defense of the claim. “Traditionally, when a party discloses privileged information to a third party, the party waives the right to assert the privilege,” the authors said. “One exception to this general rule is the common interest doctrine,” pursuant to which courts generally will not find waiver following the disclosure of privileged information to a third party if the privilege holder and third party share a common interest (e.g. defense against a claim).

Because the common interest doctrine does not provide full protection and varies by state, the authors explored several precedent-setting decisions across the country to provide greater context. While treatment of privileged information given to a third party will vary by scenario and state, Tatjana, Britt and Alex also offered some general strategies for mitigating risk when purchasing RWI coverage.

The full article, “Privilege Waiver Risks from Reps & Warranties Insurance Use,” was published by Law360 on May 21 and is available online (subscription required) or in this PDF.

This article was featured in the Law360 weekly recap of articles that generated the most buzz the previous week, “In Case You Missed It: Hottest Firms And Stories On Law360” (May 28, 2021).