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California Bar Issues Formal Opinion RE: ESI and Duty of Confidentiality

Posted on September 10th, 2014

In our last post, we reviewed the California Bar Association’s Formal Interim Opinion No. 11-0004, concerning the ethical duties surrounding the handling of electronically stored information (ESI). We reviewed the hypothetical scenario and went over why the attorney breached the duty of competence when he made several mistakes regarding litigation holds, ESI orders and production. Basically, the opinion stated that if you do not understand enough about ESI to competently represent your client, you better consult with an ESI expert.

However, the hypothetical attorney in the formal opinion breached more than just the duty of competence. The opinion emphasizes that the duties of an attorney include keeping confidences and “secrets” as to protected communications. To protect communications, one must act reasonably to protect the information in the first instance. The failure to exercise reasonable care in protecting privileged ESI communications can constitute a waiver of such privilege. Additionally, “secrets” include proprietary information that is not otherwise covered under attorney-client privilege. Yet, secrets must be protected by an attorney during discovery as well.

The Formal Opinion emphasized that due to the hypothetical attorney’s failure to consult with an ESI expert, the agreed-upon search terms were overly broad. This meant that not only was privileged ESI sent over, but proprietary secrets were sent to the client’s main competitor. Although there was a clawback provision, it only called for return of privileged information, which the trade secrets did not fall under. The attorney failed to review the ESI before tendering it to opposing counsel, so he made absolutely no attempt to identify privileged information (which may result in a waiver or the clawback provision not even applying to the data!)

Therefore, the client suffered great prejudice directly due to the attorney’s failure to protect the information by understanding ESI in discovery or consulting with an expert in electronic discovery.

The attorney therefore breached the duty of confidentiality to this client regarding the tendering of privileged and proprietary information and failing to review the data prior to production.

The ethical breaches do not even end here. Attorneys also have a duty to not suppress evidence and a duty of candor; were these ethical obligations also breached? Our discussion of California Bar Association’s Formal Interim Opinion No. 11-0004 continues in the next post.

ILS – Plaintiff eDiscovery Experts

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