By: Arend J. Abel, Attorney

Lawyers for an insurance company got a nasty surprise when a federal district court held that their use of the file-sharing service Box® waived attorney-client privilege and work product protections for the company’s entire claims file.  On February 9, in Harleysville Insurance Company v. Holding Funeral Home, the United States District Court for the Western District of Virginia decided that putting the file in an online “folder” for which it had previously sent a link to a third party waived both the attorney-client and work product protection.

In the case, the lawyers had previously sent an outside investigator a link to the folder at a time the folder’s only contents were a video that wasn’t privileged.  Later, though, the lawyers uploaded the claims file to the same folder.  Then, the other side subpoenaed the investigator’s records, and the investigator produced the email containing the link because the email was not privileged.  However, the link allowed the other side’s lawyers to access the folder, which by then contained privileged information.

On the insurance company’s motion to disqualify opposing counsel for accessing and using privileged information, the Court held that the privileges were waived because the company conceded its actions “were the cyber world equivalent of leaving its claims file on a bench in the public square and telling its counsel where they could find it.”  The court found it “hard to imagine an act that would be more contrary to protecting the confidentiality of information than to post that information to the world wide web.”

I’m not sure I agree with the court’s rationale, or the insurance company’s concession.  In my view, providing the link is more like providing a map to a building containing the documents and a key to the building.  There might still be a waiver, if the map and key are provided, as in this case, to a third party, and the lawyer later decides to move privileged documents into the building and leave them lying around.

But regardless of whether one agrees with the court’s rationale, the prudent steps for a lawyer to take at this point involve providing more security for files shared via the cloud than a simple link, which could be forwarded and shared with anyone.  At least some cloud services provide those sorts of tools.  If you plan to use the cloud to share files with clients or co-counsel, find out which services have those tools,  and how to use them.