Protecting privilege: Between a rock and a hard place

Where sharing of privileged information in any way presents too much risk from the perspective of the policyholder, insurers may be willing to agree to waive any policy requirement to comply with claims handling provisions until the underlying dispute is resolved. This approach will likely make accessing funds from insurers difficult until after resolution of the dispute. It does, however, allow the policyholder to maintain the right to seek recovery in the future once privilege concerns are at an end.

Often in order to confirm cover, insurers need to understand the nature of the liability (should it arise). Once cover is confirmed, common interest privilege may apply. In that scenario, it may be possible for legal advice to be provided on a hypothetical basis sufficient for insurers to confirm cover which may then enable common interest privilege to be established to protect the sharing of future legal advice on the merits.

This is a suggestion often made by law firms in order to protect the legal advice that might be betrayed by the detail of the narratives. This can be a useful step to maintain confidentiality in the legal advice. Note that to the extent that narratives do betray the detail of legal advice provided they will generally attract privilege or similar protections afforded to that advice itself.

Where privilege is being maintained on the basis that advice and documents are being shared on a confidential basis and for limited purposes the policyholder can take active steps to enforce that. For example, sharing via a dataroom with limited access, download and printing permissions which reduces the risk of there being a confidentiality breach.

Where particularly sensitive matters arise, the policyholder may consider sharing information verbally rather than in writing so that privileged documentation is not created.

Keep communications regarding legal advice separate from other communications for example in relation to coverage.