Attorney-Client Privilege, Work Product, in Bankruptcy

The U.S. Trustee comes a’knocking at your door.  it doesn’t care about no stinkin’ attorney-client privilege.  The attorney work product privilege is just so many meaningless words to it.

The government wants to see, um, EVERYTHING in your files (both from the debtor and the attorney).  It wants to examine  the debtor on all communications with the attorney. Fortunately, bankrupts do not give up these rights when seeking protection.

Sure, communications to attorneys about facts which are intended to be published are not privileged:  Credit card identities and balances, for example.  But communications intended to be confidential and that seek legal advice retain their protected status in the bankruptcy context.

That’s the November, 2012 ruling of the McDowell case out of Texas.  Craig Andreson wrote extensively about it.  It is worth repeating.

A take-home questionnaire is the same as a question-and-answer exchange in person with an attorney. It’s just as protected.  The client is seeking legal advice, and is communicating with the attorney for that purpose.  Perhaps, ultimately, some or most of the information will appear in a final filing but that’s not the point.  The point is the seeking of legal advice.  The point is the intent of confidentiality.

The privilege is waived if the debtor doesn’t later testify about the intent to keep the communication confidential.  It is also waived if the client says that an omission is the lawyer’s fault.  There is no privilege if an injury (tort) or a crime is furthered by the communication.

McDowell also addresses the work product privilege.  As Craig wrote, an earlier Seventh Circuit case “exhibits a fundamental lack of understanding about the bankruptcy process.  McDowell specifically rules that a bankruptcy attorney’s work product is in anticipation of litigation and therefore is protected.

Heck, of course it is.  Creditors, the trustee, and the U.S. Trustee go through the filings with a fine tooth comb looking for evil, bad faith actions.  Your bankruptcy attorney is examining your communicated information to avoid problems.  That is precisely the anticipation of litigation about which the earlier appellate decision was ignorant.

Read the case.  Read Craig’s analysis.  Let’s continue to be strong advocates for our debtor clients.