The primary purpose of the Rule is to reduce the costs of time-consuming privilege review. If enacted, the Rule will limit the consequences of both intentional and inadvertent disclosures of attorney-client communications and attorney work product; and allow the parties to create their own waiver rules that are binding on third parties.

The theory behind the Rule is that (1) most documents produced in discovery have minimal value; (2) reviewing them in the modern era of email and electronic communication is enormously costly; and (3) attorneys worried about the consequences of waiver for even a single document must engage in time-consuming and costly privilege reviews and make strained privilege claims. The Rule attempts to address these concerns.

Limiting Waivers

The Rule's first two sub-sections establish new, uniform rules governing the consequences in federal and state proceedings of disclosures that occur at the federal level. As explained later, the parties are free to modify the rules by agreement and make the agreement enforceable on third parties by incorporating it into a court order. The first two sub-sections control in the absence of any agreement.

Sub-section (a) limits subject matter waivers to intentional disclosures where the disclosed and undisclosed information "ought in fairness ... be considered together." The drafters' intent was to sharply restrict subject matter waivers to unusual cases. By implication, inadvertent waivers cannot result in subject matter waivers.

To resolve conflicting court decisions, sub-section (b) sets forth a single standard governing the effects of inadvertent disclosures made in federal proceedings. Under this sub-section, inadvertent disclosures that occur in federal proceedings will only result in a waiver of privilege or work product protection (in federal and state proceedings) if the disclosing party failed to take reasonable steps to avoid or ameliorate the disclosures.

Reconciling Conflicts Between State and Federal Law in Favor of Non-Waiver

Sub-sections (c) and (d) of the proposed Rule address the possible conflicts that may arise between state and federal laws governing disclosure. Under sub-section (c), a federal court assessing the effect (in a federal proceeding) of a disclosure that occurred at the state level must look to both state and federal law and apply the law that provides the most protection against waiver. The one exception is that the sub-section does not apply if a state court has already issued an order concerning the disclosure.

Sub-section (d) makes federal court orders concerning waiver issues enforceable in other federal and state proceedings. Without this provision, and the provisions in sub-sections (a) and (b) extending the subject matter and inadvertent waiver rules to all federal and state proceedings, a party might still worry about the consequences of a waiver in another proceeding and feel compelled to engage in expensive privilege reviews or make dubious privilege claims.

The Rule does not purport to regulate the effect of state disclosures in other state proceedings.

Parties May Determine the Scope and Consequences of Privilege Waivers

Sub-section (e) may have the most far-reaching consequences of any section in the proposed Rule. This sub-section provides that an agreement on the effect of disclosures in federal proceedings is binding only on the parties to the agreement, "unless it is incorporated into a court order." Though stated negatively, this sub-section allows the parties to create their own waiver rules if they incorporate them into a court order. As already noted, sub-section (d) makes court orders enforceable in all other federal and state proceedings. Therefore, the two sub-sections together allow the parties to reach agreements binding on not only themselves, but also third parties. Such agreements would supersede the default rules established in sub-sections (a) and (b).

This provision could result in tremendous savings of time and money. The parties could, for example, agree to exchange documents without any privilege review or with only a limited review subject to an agreement that the other party would return any privileged document, not claim a waiver, or other conditions. Whether this was in a party's interests would, of course, be a matter for each party to determine on a case-by-case basis.

Effective Date

The Rule will apply to "all proceedings commenced after the date of enactment . . . and, insofar as is just and practicable, in all proceedings pending on such date of enactment."

¹ S. 2450, 110th Cong. § 1(2008); 110 CONG. REC. H7817-20 (daily ed. Sept. 8, 2008).