The Common Interest Doctrine and Disclosures during Negotiations for Substantial Transactions

During negotiations for corporate transactions, each party involved shares non-public information with the other party. Information shared during negotiations is instrumental in assessing the financial and legal risks of doing business. Sometimes, one of the parties discloses communications protected by the attorney-client privilegesuch as a patent opinion letter or a memorandum assessing a corporate client's litigation risks. Disclosure of a privileged document during business negotiations appears to work an implied waiver of the attorney-client privilege, meaning that the shared documents could be compelled in future litigation. Document sharing does not inexorably work a waiver: the law of evidence recognizes that parties with a common interest may share privileged communications without waiving the privilege.' Nevertheless, the "common interest doctrine" arguably does not protect disclosures during business negotiations. In order to come within the common interest doctrine, parties must share a common interest that is "legal, not solely commercial,"2 and parties must anticipate collaboration in pending or future litigation.3 Under this definition, one might argue, corporations engaged in negotiations do not share a common interest because each party seeks to maximize its commercial gain