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New York Rejects Federal Trend, Limits Common Interest Doctrine

By Kurt Hamrock and Ellen Noble

In today's complex world, companies need free and open communication with not just their own legal counsel, but with the attorneys of other companies facing similar legal issues. Full and frank communication with another party's legal counsel is often necessary effectively to defend a client and to ensure compliance with the law. Thus, the question, “Under what circumstances may a company share privileged information with a third party?” is an important one.

On June 9, 2016, New York's highest court answered that question narrowly, holding that when a company shares privileged communications with a third party, the privilege is waived unless the company shares a common legal interest with the third party and the communications relate to pending or reasonably anticipated litigation. Ambac Assurance Corp. v. Countrywide Home Loans, Inc., — N.E. 3d —, 2016 WL 3188989 (N.Y. June 9, 2016). The decision runs counter to those of many other jurisdictions and requires counsel to act cautiously before sharing such information ' in New York, and perhaps in other venues as well.

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