Clawback – Trick or Treat

Many litigators do not employ the clawback trick.  You just have to take a look at the circumstances surrounding J-M Manufacturing Company, Inc v. McDermott Will & Emery to bolster this point.  Now, this may be the case because the clawback provisions appear in the Federal Rules of Evidence, rather than the Federal Rules of Civil Procedure (FRCP).  Often, litigators do not focus on the FRCP because the Rules of Civil Procedure never prompt litigators to focus on them during the pretrial process.

Nonetheless, the Federal Rules of Evidence (FRE) 502 provides lawyers with a great deal of protection from inadvertent disclosures.  It states that the disclosure of attorney-client or work product information in a federal proceeding does not waive either privilege if:

(1) The disclosure was inadvertent;

(2) The holder of the privilege took reasonable steps to prevent the disclosure; and,

(3) The holder promptly took reasonable steps to rectify the error.

The FRE Advisory Committee Notes, explain that Rule 502 “contemplates enforcement of ‘claw-back’ and ‘quick peek’ arrangements as a way to avoid the excessive costs of pre-production review for privilege and work product.”  Plainly, under FRE 502, if a privileged document is inadvertently disclosed, the document MUST be returned.  Furthermore, if a federal court enters a clawback order, FRE 502(d) provides that the order can prevent the inadvertent disclosure from being a waiver not just between the parties to the agreement, but also “in any other Federal or State proceeding.”  So, parties should ask federal courts to enter clawback orders so that their clients have the broadest protection to the attorney-client and work product privileges.

Lawyers should stop missing this trick. They ought to add clawback provisions to their standard lists of items that they consider in every case. Someday, when you inadvertently disclose a privileged document, you’ll be glad that you put Rule 502 clawback provisions on your list of items to consider in every case.