Joint Defense Agreements and What Lawyers Should Know About Them

In many cases, a transaction, litigation, or business dispute can involve several parties, each with different attorneys but the same interests. As such, each party may wish to communicate with the others on issues of planning or strategy without risking the waiver of any privileges or immunities. In this case, clients and counsel can benefit from the courts’ options and they can share a joint defense or common interest privilege.

A joint defense or common interest privilege’s scope, boundaries, and prerequisites can differ, depending on the jurisdiction. Not all state and federal jurisdictions recognize a joint defense or a common interest privilege and the extent to which the privilege applies differs between jurisdictions. Many lawyers pursue formal written agreements on behalf of their clients in an attempt to bridge these gaps. However, such agreements do not necessarily have to be in writing in order for them to be enforceable.

It’s important to remember that there are some jurisdictions which distinguish between – and quite strictly define – the common interest privilege and the joint defense privilege. There are some courts which have determined the joint defense privilege as a narrow privilege, usually arising from litigation. The common interest privilege, however, is generally seen as broader and litigation is not required for it to be pending. What’s more, some courts will sometimes use the terms interchangeably, without any meaningful distinction between the two.

As such, many lawyers who address this issue try to recognize the generally accepted distinctions between the two privileges and then attempt to create enforceable protections. Below are a few tips you may want to consider.

What is the Joint Defense Privilege?

In litigation, it is common for co-defendants to pursue a common interest in defeating any claims made by the plaintiff. Particularly in cases where the co-defendants aren’t actively trying to pin the blame on each other, courts have recognized that defendants might actually engage in a joint defense, sharing information and even expenses. In these cases, even though communications between the defendants are probably not protected in case of a dispute between them, they could be protected from discovery by plaintiffs if the defendants are sharing a joint defense.

When looking at the joint defense privilege as a strictly legal matter, it is something of a misnomer, as it is not an actual affirmative privilege. Instead, it is generally viewed as an exception to the rule on waiver. Usually, any sharing of confidential information with third parties is considered a waiver of the privilege. That being said, any party of a joint defense agreement can typically preserve their privilege, even after confidential information has been shared.

To ensure that the privilege is not lost when sharing communications with other parties, they are usually required to demonstrate three things: that any communications made were pursuant to a joint defense, that their purpose was to further that joint defense’s goals, and that the privilege was not waived.

It may not be required, but many practitioners choose to document in writing a joint defense privilege’s scope, duration, boundaries, as well as parties.

A Clear Definition of the Relationship

Joint defense agreements which simply state that the parties are co-defendants who wish to share information may not be sufficient to invoke the joint defense privilege. There are some courts which are not as skeptical of the efforts made to hide behind the joint defense privilege and they may even be reluctant in extending the privilege to third parties without any evidence confirming that such extension is supported.

When reviewing a joint defense agreement’s validity, courts typically focus on whether the co-parties’ interests are truly aligned. For example, there have been several high-profile cases where courts declined to apply joint defense agreements because while the parties’ legal interests were similar, they were not identical. Another reason used in the past has to decline joint defense agreements has been the fact that the parties’ shared interest was mostly commercial in nature, not legal. Some court have indeed found that merely sharing a desire to win a litigation is insufficient to define a joint defense or a common interest.

By clearly articulating the shared legal interest in writing, a practitioner may increase the likelihood that their client’s shared confidences will be protected.

Some Potential Conflicts of Interest

Sometimes it can be difficult to assert that parties with different lawyers share identical interests. The mere fact that there are separate counsel involved might suggest that there are actually some issues on which the parties’ interests do not fully align. When their differing interests result in differences in approach, strategy, or resolution, the joint defense’s very predicate is called into question.

If the differences are unaddressed, they may jeopardize every party of the joint defense agreement. As such, it is important for a joint defense agreement to address exactly what will happen in the event of a party deciding to terminate or abandon the agreement, for whichever reason.

For the lawyers, this may include clarifying any duties they have to nonclients who are parties to the agreement. The majority of joint defense agreements mention that the joint defense relationship will not serve as a basis for attempting to disqualify another counsel. Additionally, it may specify that it does not support attorney-client relationships between one party and another party’s attorney.

Common Interest Agreements

Not all matters in which parties may want to exchange information involve litigation. In order to address this possibility, many courts have decided to extend the principles of the joint defense privilege to situations where litigation is nonexistent for parties who share common interests.

An enforceable common interest agreement’s concepts and predicates are very similar to those of a joint defense agreement. Since the existence of common interests is not quite as obvious as in a context involving litigation, clients and their lawyers often take steps to document the inception of any common interests, their duration, scope, boundaries, as well as termination. Provisions which confirm the duties of the lawyers are also helpful in avoiding any future disputes.

Joint defense and common interest agreements can be very effective in advancing the clients’ interests and reducing expenses. It’s important to get them right so that they themselves do not actually become the basis of litigation.