Attorney-Client Privilege Considerations in the Context of Debtor Wrongdoing

By: Russell L. Munsch (Co-speaker)
The University of Texas at Austin Annual Bankruptcy Conference
November 21, 2002

I. Purpose and Scope of the Attorney-Client Privilege
A. Purpose
The purpose of the attorney-client privilege is to protect not only providing professional advice to those who can act upon it, but also providing information to the lawyer to ensure sound and informed advice. Upjohn Co. v. United States, 449 U.S. 383, 391 (1981). The privilege encourages clients to be completely truthful with their attorneys, to enable their cases to be honestly and effectively defended, and "to promote broader public interest in the observance of law and [the] administration of justice." Upjohn, 449 U.S. at 393 (1981).

B. Scope
The attorney-client privilege protects only the contents of the communication itself. If the information can be obtained from a source other than the privileged communication, then disclosure is not protected from discovery. United States v. O'Malley, 786 F.2d 786, 794 (7th Cir. 1986) ("the privilege attaches not to the information but to the communication of the information").

II. Ownership and Control of the Privilege
A. Who Controls the Privilege?
Outside of bankruptcy, the client is the sole holder of the attorney-client privilege. See In re Bame, 251 B.R. 367, 372 (Bankr. D.Minn. 2000). However, "under the Bankruptcy Code the privilege as a rule of evidence may be invoked or waived by the person owning the related causes of action," thus the DIP or Trustee may invoke or waive the privilege. See Whyte v. Williams, 152 B.R. 123, 125 (Bankr. N.D. Tex. 1992).

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