Opinion ID: 1384554
Heading Depth: 1
Heading Rank: 3

Heading: Reserve Information and the Attorney-Client Privilege

Text: In the context of asserting the attorney-client privilege to protect disclosure of reserve information, sufficient evidence must be presented to show that attorneys were included in the procedure of establishing reserves by preparing status reports or other supporting documentation for use by those employees responsible for setting reserves. Timothy M. Sukel and Mike F. Pipkin, Discovery and Admissibility of Reserves, 34 Tort & Ins. L.J. 191, 208 (1998). [8] In syllabus point 3 of State of West Virginia ex rel. Allstate Insurance Co. v. Madden, 215 W.Va. 705, 601 S.E.2d 25 (2004), we held: In order to assert an attorney-client privilege, three main elements must be present: (1) both parties must contemplate that the attorney-client relationship does or will exist; (2) the advice must be sought by the client from that attorney in his capacity as a legal adviser; (3) the communication between the attorney and client must be identified to be confidential. (Internal quotations and citations omitted). Application of the attorney-client privilege to reserve information has been addressed by only one court in a meaningful manner. The decision in Simon addressed the issue narrowly in the context of whether risk management documents, containing aggregate reserve information derived from individual reserve information, were protected by the attorney-client privilege. Simon resolved the issue by stating: Assuming arguendo that the attorney-client privilege attaches to the individual case reserve figures communicated by the legal department to the risk management department, we do not believe the privilege in turn attaches to the risk management documents simply because they include aggregate information based on the individual case reserve figures. For the reasons that we have already stated in relation to the work product doctrine, we do not believe that the aggregate information discloses the privileged communications, which we are assuming the individual reserve figures represent, to a degree that makes the aggregate information privileged. The attorney-to-client communications reflected in the risk management documents are therefore not protected by the attorney-client privilege. Simon, 816 F.2d at 402-03. See In re Pfizer Inc. Secs. Litig., 1993 WL 561125,  ([T]he applicability of the [attorney-client] privilege to correspondence from attorney to corporate client depends on whether the subject matter was individual or aggregate case reserves.... [W]e believe that documents containing aggregate information are not `predominantly concerned' with conveying legal advice, and are not therefore entitled to attorney-client privilege protection.). I disagree with Simon's sweeping analysis. I believe that the issue of whether the attorney-client privilege attaches to aggregate reserve information depends upon the level of input by the attorney. If individual reserve information, prepared by an attorney for his/her client with the expectation of confidentiality, is not a substantial component of the aggregate reserve information, then the attorney-client privilege should not attach to the aggregate reserve information. On the other hand, the attorney-client privilege should attach to aggregate reserve information, if individual reserve information prepared by an attorney is a substantial component of the aggregate reserve information. The issue of substantiality requires a case-by-case determination. The decision in Simon noted that it was not taking a position on whether the attorney-client privilege in fact attaches to the individual case reserve figures, other than to note that such a determination would require analysis of whether the individual reserve figures are based on confidential information provided by [the attorney]. Simon, 816 F.2d at 403 n. 5. Other courts have addressed the issue without substantive discussion, and held that documents containing individual case reserve figures are predominantly legal in nature. Therefore, those are [protected by the attorney-client] privilege[]. In re Pfizer Inc. Sec. Litig., 1993 WL 561125, . See also Boston Gas Co. v. Century Indem. Co., 2005 WL 2150530 (attorney-client privilege protected disclosure of reserve information); Coltec Indus., Inc. v. American Motorists Ins. Co., 197 F.R.D. 368 (N.D.Ill.2000) (same); Stevens v. Hartford Ins. Co. of the Midwest, 646 So.2d 981 (La.App.1995) (same); Hoechst Celanese Corp. v. National Union Fire Ins. Co. of Pittsburgh, Pa., No. Civ. A. 89C-SE-35, 1995 WL 411805 (Del.Super.Ct. Mar. 17, 1995) (same); Guaranty Corp. v. National Union Fire Ins. Co. of Pittsburgh, Pa., 1992 WL 78387,  ([I]f reserve figures are based on information provided by an attorney, they ... may be covered by the attorney-client privilege.); Independent Petrochemical Corp. v. Aetna Cas. & Sur. Co., 117 F.R.D. 283 (D.D.C.1986) (attorney-client privilege protected disclosure of reserve information). But see Champion Int'l Corp. v. Liberty Mut. Ins. Co., 128 F.R.D. 608 (S.D.N.Y.1989) (insurer failed to show attorney-client privilege applied to reserve information). The above authorities make it clear that the attorney-client privilege attaches to individual reserve information when the elements of that privilege are established. In view of the foregoing, I respectfully concur.