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Inadvertent Disclosure of Privileged Information – Major Headache or Minor Hiccup? Part 2

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Once you have navigated and closely followed the rules regarding how to handle inadvertent disclosure, a very important question remains: Does inadvertent disclosure destroy the privileged nature of the communication?

This is an interesting question and one that the RPCs seem to avoid.  In fact, Comment 2 of RPC 4.4 states that “the question of whether the privileged status of a writing has been waived” is “a matter of law beyond the scope of these rules.”

So how does North Carolina case law address this issue?  Case law in NC regarding this issue is “not well developed.”  Blythe v. Bell, 2012 NCBC 42 (N.C. Super. Ct., July 26, 2012) 2012 WL 3061862; see also Morris v. Scenera Research, LLC, 2011 NCBC 33 (N.C. Super. Ct., Aug. 26, 2011), 2011 WL 3808544.  The Court in Morris had used the Fourth Circuit’s “five-factor balancing test” to determine if the privilege had been waived upon inadvertent disclosure.  The Court elected to use the Fourth Circuit’s test in that particular case because the issues arose during discovery while the case remained in federal court awaiting remand, and the discovery plan was developed using the federal rules.  Blythe at ¶ 51 citing Morris.  The Court in Blythe opined that the Fourth Circuit’s test was “an appropriate vehicle for the North Carolina state courts.”

So what are the balancing test factors?

(1)    The reasonableness of the precautions taken to prevent inadvertent disclosure;

(2)    The number of inadvertent disclosures;

(3)    The extent of the disclosures;

(4)    Any delay in measures taken to rectify the disclosures; and

(5)    The overriding interests of justice.

Blythe at ¶ 52 citing Morris, 2011 NCBC 33 at ¶ 45.

Are some factors more important than others?  The Court in Blythe found “that the balancing test is controlled by the first factor, and that the absence of reasonable precautions undertaken before the production of privileged communications prevents the court from using the other factors to protect against waiver.”  Blythe at ¶ 53.  The Court also stated that “[w]hether the efforts were ‘reasonable’ obviously depends on the particular circumstances that may vary from case to case.”  Blythe at ¶ 54.

So, in short, the answer to whether the privilege is waived by the inadvertent disclosure is one that will vary.  Because there is no clear answer, it is very important to ensure you have procedures in place to prevent inadvertent disclosure of privileged information, but if you happen to disclose such information, notify opposing counsel as quickly as possible to hopefully resolve the matter.  It is wise to keep professionalism in mind when deciding whether to challenge the privilege, as this situation could just as easily happen to you.