Attorney invoices may be protected in their entirety by the attorney-client privilege during ongoing litigation. After litigation has concluded, however, those same invoices may be discoverable. So concludes the California Supreme Court in a fascinating ending to a case we have been following since last June of last year, County of Los Angeles Board of Supervisors v. Superior Court (opinion). In a 4-3 decision that mirrored the split we observed in oral argument, the Court reversed the decision of the Court of Appeal. The Court found that while information contained in client bills may not be absolutely privileged, it protects information so close to the core of the attorney-client relationship that it is protected during the course of ongoing litigation. This reasoning allowed the court to reach a potentially novel conclusion: information that is protected at one time might not be protected at another. The Supreme Court sided with the Court of Appeal—as expected—on the basic premise that attorney billing invoices may reveal important information about litigation strategy and thus generally protected from disclosure. But the Court reversed the Court of Appeal in allowing possible discovery of those bills after litigation has ended. Notably, the Court's decision appeared to be driven, at least in part, by the strong public policy favoring disclosure of government documents under the California Public Records Act. As a result, it is unclear whether, absent a similarly strong policy consideration where the government is not involved, the Court would have limited the protections offered by the attorney-client privilege after litigation concludes.
For policyholders, this conclusion reinforces the need to be proactive on privilege issues when submitting defense bills to insurers. Because the information in a bill is privileged in its entirety during ongoing litigation – i.e., when insureds usually submit bills to their insurers and demand prompt payment – policyholders must be careful not to effect a broader-than-intended waiver of the privilege by submitting bills to insurers whose policies provide for "duty to pay" defense costs, rather than a "duty to defend" (see our more in-depth discussion here). Policyholders should provide a cover letter explaining bills are submitted to the insurer alone and any disclosure of privileged information contained in the bills does not imply a broader waiver of the privilege or is otherwise protected from third-party disclosure by California Civil Code section 2860. Defense counsel should also carefully consider what to include in billing descriptions sent to insurers given that some of the information might not be protected by the privilege after litigation concludes. In some instances, the ultimate recourse might be to redact sensitive information, particularly where information bears on coverage issues; but a policyholder considering redaction should raise this issue proactively with the carrier, to minimize possible disputes or delayed payments for covered costs.
For additional coverage of this issue and this case, see our prior posts: Submitting Your Defense Bills to Insurers Could Mean Waiving Privilege; California Supreme Court Will Review Appellate Decision Holding that Attorney Bills Are Privileged; California Supreme Court Leans in Favor of Treating Defense Bills as Privileged Communications
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