Asserting Privileges: Impact on Negotiations
As a litigator since 1980 and a mediator since 1991, I have consistently noticed that many of my colleagues do not appreciate how litigation tactics and negotiation tactics interrelate.
Master negotiators understand that litigation and negotiation intertwine. Indeed, I believe that I could make a persuasive argument that litigation is just another form of what we customarily call “negotiation.” Like negotiation, litigation is a method for people who disagree about something to come to an agreement. Unlike traditional forms of negotiation, however, litigation has specific rules, and you cannot always walk away from litigation.
Novices do not understand that filing a motion can improve leverage in negotiations; that settlement conferences and mediation have value as litigation tactics; and that an adjudication usually means that you are negotiating on a new playing field. Masters keep a vigilant watch on many diverse factors that affect the negotiation of an agreement. Most importantly, they understand leverage.
Leverage! Master negotiators thrive on it, starve from lack of it, develop it when they do not have it, improve it when they do, and understand its nuances. Leverage can be static or dynamic, long-term or short-term, actual or potential. How does leverage relate to the arcane subject of legal privileges?
For the uninitiated, a legal “privilege” is the right to refuse disclosure. Article V. of the Texas Rules of Evidence describes the “what” of privileges. The “how” is described by Rule 193.3.
My experience as a litigator leads me to believe that, when confronted with a discovery request for information that may be potentially privileged, my colleagues do what I do: assert it! Whether we are talking about a mental health privilege, a spousal privilege, or the 5th Amendment privilege against self-incrimination, as a knee-jerk, we assert it. Is that necessarily the best response? What is the downside of asserting a privilege, and how does that impact negotiations?
My thesis: When a litigator asserts a privilege, refusing to disclose documents or information, she may be giving her counterpart greater leverage. This will impact negotiations, whether they involve ultimate issues or interlocutory issues.
Why? Assertion of a privilege gives the requesting party a potentially powerful challenge (what do you have to hide?), it may put the party asserting the privilege on the defensive, and this may go on for months of litigating about the privilege. The party who asserts it better be right.
If there is a challenge of the assertion of a privilege, it may well take the form of the “offensive use doctrine,” enunciated by the Texas Supreme Court in the case of Ginsberg v. Fifth Court of Appeals.
In Ginsberg, a plaintiff filed suit in 1981 seeking to set aside deeds that she signed in 1972. The defendant asserted a defense of the statute of limitations. The plaintiff stated that she could not remember signing one of the deeds at issue. She also revealed that a psychiatrist was treating her at that time. When the defendant sought to discover the records of her psychiatric treatment, she asserted privileges. The Texas Supreme Court found that this was an offensive use of the privilege, stating the rule:
A plaintiff cannot use one hand to seek affirmative relief in court and with the other lower an iron curtain of silence against otherwise pertinent and proper questions which have a bearing upon his right to maintain his action. (Ginsberg at 108).
Eight years later, the Court applied this rule to a case involving the attorney-client privilege in Republic Insurance v. Davis, and ten years later, the Court applied the rule to a case involving a plaintiff’s refusal to disclose information based upon his 5th Amendment privilege in the case of Texas Department of Public Safety Officer’s Assn v. Denton.
The offensive use doctrine includes three essential elements:
the party asserting the privilege is seeking affirmative relief;
the evidence the party refuses to produce is “outcome-determinative”; and
there is no alternative source for the evidence.
Simply put, if a party is seeking affirmative relief, he or she cannot shield evidence that may be “outcome determinative.”
Master negotiators understand that asserting a privilege should not be a mindless exercise. Doing so exposes the party asserting the privilege to the risk of the offensive use doctrine. When those opportunities arise, they shift the negotiating leverage by shifting the risk. Now the party resisting discovery has risk it did not have previously: the risk of potential sanctions, which may include striking his right to assert affirmative relief in the lawsuit. Is it worth it?
Thomas Noble is a solo practitioner whose practice focuses primarily on family law and estate planning for the middle class. He was chairman of the DBA ADR Section in 1999 and continues to take an active role in both family law litigation and ADR. For more information, please go to tnoblelaw.com