Stroock Special Bulletin
"Ambac Assurance Corp. v. Countrywide Home Loans, Inc.: New York Court of Appeals Rejects Expansion of the Common Interest Exception to Waiver of Attorney-Client Privilege"
The New York Court of Appeals recently issued a decision rejecting the expansion of the common interest exception to waiver of the attorney-client privilege. In a split decision issued June 9, 2016, the Court of Appeals held in Ambac Assurance Corp. v. Countrywide Home Loans, Inc. that the common interest exception applies only where shared information relates to the parties’ legal interest in a pending or threatened litigation.
This Stroock Special Bulletin discusses the Court of Appeals ruling, which overturns an Appellate Division, First Department decision that held the exception applied even in the absence of a pending or threatened litigation, so long as the communication related to a shared legal interest – for instance, the completion of a merger. The pending-or-threatened litigation requirement narrows the availability of this important exception. Although the decision should be of interest to all attorneys and parties considering the disclosure of privileged information to a third party, it should be of particular interest to corporate transactional practitioners, as it will have consequences for parties sharing privileged communications in certain corporate transactions.