The Attorney-Client Privilege and Community Associations

Authored by Hamony Taylor and David Wilson

As our community association clients
settle into a new year and new issues, many boards with new members find
themselves with questions or confusion about the attorney-client privilege.
Because this privilege is complicated but incredibly important, we thought it
would be helpful to go over the basics and how boards can and should preserve
the privilege.

Very generally, in both North and South
Carolina, the attorney-client privilege protects communications between an
attorney and a client in the following circumstances:

  • The parties were in an attorney/client relationship. It is not necessary that the client has yet hired the attorney; communications made during an initial meeting or consultation are protected and will stay protected, even if the client does not ultimately retain the attorney.
  • The communication was made in confidence. This covers communications made with the intent that they stay private and confidential. An offhand comment about the weather would likely not be “made in confidence.”
  • The subject of the communication was related to the matter about which the attorney was being consulted. Again, you didn’t hire an attorney to talk about the weather—but if you hired them to help you prove weather was a factor in an accident, the comment could be related and thus privileged.
  • The communication was made in the course of the client seeking advice or representation, and for a proper purpose.
  • The client has not waived the privilege.

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If all of these elements are satisfied, the communication is “privileged” and generally not subject to discovery by third parties.

We’ve seen boards of directors get confused and even waive the privilege in several common circumstances.  Here are some examples:

First, the privilege may be waived by the involvement of third parties. If an attorney is invited to consult with a board about a confidential matter, and a board member’s spouse/child/friend sits in the meeting, the privilege is waived.  That is why, if we don’t know all of the board members, we will often ask that before we discuss privileged information that any non-board members leave the room.  We have even asked a board member’s spouse to sit in the car in January before so we could discuss a lawsuit.  We didn’t want to be rude, but we also did not want our settlement strategy to be fair game to the other side.

Along those same lines, if an attorney sends their privileged legal opinion to a client and that email/letter is shared with other parties, the privilege is waived. We recommend that clients treat all communications with counsel as privileged unless advised otherwise.

Second, the privilege does not attach if
the communication is made with an attorney in a non-confidential situation. If
you start telling an attorney friend about a confidential matter at a cocktail
party, with people nearby/overhearing, this communication is not made “in
confidence.” The elements above still have to be met.

Last but not least, please don’t waive possible privilege without careful consideration. We have had well-meaning board members share my counsel with close friends and neighbors, believing that they would hold this communication in confidence and the privilege would be protected.  Then later, when they were asked in a deposition if they had shared any of the attorney counsel with third parties, they truthfully admitted they had—and had told that friend our settlement strategy.  As you can imagine, this resulted in the waiver of the attorney-client privilege, and some very unhappy board members.

There are a lot of nuances to the attorney-client privilege, and we encourage you to read Jim Slaughter’s blog from May 2016 regarding the attorney-client privilege and property managers.  If you have any questions about the privilege, please feel free to contact Harmony Taylor, David Wilson, or any of Black, Slaughter & Black, P.A.’s attorneys in our Charlotte, Greensboro, Triangle or Coastal offices.

Author: Harmony Taylor
Articles have been Reprinted with permission from Black, Slaughter, Black.

* These articles and related content on this website are provided without warranty of any kind and in no way constitute or provide legal advice. You are advised to contact an attorney specializing in Association Management for legal advice related to your specific issue and community. Some articles are provided by thrid parties and online services. Display of these articles does in no way endorse the products or services of Community Association Management by the author(s).