In today’s complex work of insurance, many insurance risks are “reinsured” by a separate insurance carrier. In those instances, it is not unusual for insurers and reinsurers to have regular communications concerning the insured, and in particular, concerning matters about which they both have an interest. Most of the time, the insurer and reinsurer consider such communications to be confidential, and not subject to discovery. However, whether seemingly confidential communications between insurers and reinsurers is discoverable in litigation involving an underlying insured is not a clear cut question. Outside of Texas, there is a split of authority regarding the issue of discoverability of reinsurance communications. A recent order issued by the Northern District of Texas demonstrates that such communication can be discoverable if an insured can persuade the court that the sought after information is relevant to his or her underlying claims.
Insurers and reinsurers regularly communicate regarding matters they view as confidential. These communications often relate to claims, both routine and litigated, by the underlying insureds. Insureds, in turn, seek discovery of these communications when claims become contentious and litigated. Recent federal court decisions in Minnesota and Texas demonstrate the willingness of courts to permit discovery of communications between insurance companies and their reinsurers. Conversely, a federal court in Indiana recently rejected requests for reinsurance communications. These cases illustrate the difficultly faced by insurers and reinsurers in understanding the discoverability of their communications prior to litigation. Although insurers and reinsurers may view their communications as confidential, they must be mindful of the potential discoverability of these communications, particularly when litigated claims are involved.
I store my files on the cloud. Whenever you store your confidential stuff on someone else’s computers, you have to be wary of two things: security and privacy. A few weeks ago, I wrote this article about how to beef up your security, so today, I am going to talk about privacy.
The general consensus is that lawyers can use cloud computing. The ABA has put together this map that explains ethics opinions on the use of cloud computing by state. To sum it up, about 20 or so state bars have issued opinions that storing data in the cloud does not per se violate a lawyer’s duty of confidentiality, but you have to use reasonable care in storing your docs online.
There’s a movie on Netflix streaming right now called “Terms and Conditions May Apply.” It’s a scary documentary about how we agree to give away access to our data in the fine print of all of the internet services we use from email to social media. So, how does that relate to confidentiality of client files we store on the cloud?
Let me regale you with two recent examples of lawyers disclosing client confidences. There’s a lesson tucked into each.
First: An acquaintance sent me the résumé of, and asked me to speak to, a young lawyer. The idea was to give some general career advice, rather than necessarily to hire the person.
I’m a pushover, so I agreed to have a cup of coffee with the relatively new lawyer. Over coffee, he (or she, but I’ll use the masculine) explained that what he liked least about the job he’d just left (which was identified on his résumé) was being asked to do unethical things. My curiosity piqued, I asked for an example. He explained that he’d been asked to draft a contract that committed his employer to violating the law as part of the contractual relationship. (Think along the lines of, “We will ship the illegal weapons to you in New York.”) My young acquaintance said that he’d gone to the general counsel, who had instructed him to draft whatever contract the business wanted. The earnest young lawyer had solved the ethical problem by drafting a contract that, when read carefully, would prohibit the illegal conduct. (Think: “Under no circumstance will any weapons of any type be shipped pursuant to this contract.”)
I’m afraid I won’t be recommending this person for any jobs. . . .
* This attempt at using a disguise to commit ID theft was so pathetic, I almost feel bad for the guy. And yes, there is a photo. [Lowering the Bar]
* A longtime Arby’s employee fled when a knife-wielding robber broke into the restaurant in the middle the night. And then Arby’s fired her. At least unemployment > dying alone in an Arby’s. [Consumerist]
* Models, runway shows, and confidentiality agreements, oh my! [Fashionista]
Quote of the Day: If a Lawyer Speaks at a Public Meeting and There’s No One There to Hear Him, Does He Make a Sound?By Staci Zaretsky
As the superior court aptly observed, “The fact that the meeting occurs in a public place does not destroy the privilege, if no one hears the conversation.”
– Associate Justice Robert J. Lynn of the New Hampshire Supreme Court, in an opinion upholding the existence of the attorney-client privilege, despite the fact that an attorney discussed confidential information with his clients at a meeting that was open to the public.
So, the Customer wants you to take on unlimited liability for breach of confidentiality, indemnify (and hold harmless) for any and all bad acts of your employees, and to carry a multi-million dollar insurance policy. What do you do?
First, begin by triaging these from simplest to more complicated. During a negotiation it can be helpful to appear to “give” as much as possible up front when you’re down to a few points. This way, when the final hot button items arise, you appear reasonable.
Insurance requirements are usually no-brainers, and as long as the amounts demanded are not grotesquely high, your Risk folks will approve the proposed language with very light editing, if any. Today, it is also not unusual for the Customer to demand to be named as a payee in the event of a loss; this is often fine, and usually not an issue. More practice pointers, after the jump….
- Advertising, Biglaw, Career Center, Holidays and Seasons, Job Survey, Shameless Plugs, This Is an Ad
Back in the winter months, we surveyed Biglaw associates about working on the MLK Day and President’s Day holidays. Well, over half of respondents said they still clocked in on those holidays. But now that the weather is warmer, the barbecue grills are up and running, and partners are on vacation, surely more of you took Independence Day off, right? Take our short survey, brought to you by Lateral Link, and let’s find out.
As always, your responses are kept completely confidential. Stay tuned later this week when we reveal the survey results. For more information on vacation policies, check out the updated law firm profiles at the Career Center, hosted by Lateral Link.
Career Center: The First Rule of a Summer Clerkship Is Not to Talk About Client and Firm ConfidencesBy Above the Law
This week’s Career Center Summer Associate Tips Series focuses on the importance of maintaining client confidentiality. Nothing is more sacred to the legal profession than the confidential relationship between lawyer and client. This goes far beyond what is required by the rules of professional conduct. Your personal rule should be very simple — do not talk about the firm’s business, its clients, their problems, or anything related to them outside the four walls of the firm. With anyone. At any time. It is that simple.
The greatest risks are casual social comments. Somewhere in the middle of a case of Heineken you pass along information about something of great sensitivity to a firm client. It was an innocent, alcohol-induced disclosure on your part, but it was a disclosure nonetheless. Now, you may not worry about divulging sensitive information to a trusted friend or confidant, but the greater risk involves those comments made in restaurants, public places, or cocktail parties that directly or indirectly reveal the business of the firm or its clients.
The group at the next table may include three employees of the client, their banker or accountant, a competitor, or associates working for someone about to make a competing offer to buy your client. Trust me. They are there — perhaps not as nattily attired and lacking the Bombay Sapphire martini — but there nevertheless. It is not just legal advice or technically privileged information that you should refrain from discussing freely. It is anything about the client and their business. You risk immediate termination if you violate this rule.
Don’t forget, for additional career insights as well as profiles of individual law firms, check out the Career Center.