The Attorney-Client Privilege
One of the benefits clients receive from consulting with an attorney is the knowledge that the communication will be held in strict confidence; this is commonly known as the Attorney-Client Privilege. This protection gives clients freedom to explore their legal options without a concern that anyone on the other side of a dispute will learn about the discussion or use it to exploit any weaknesses in their legal position.
The majority of our clients are community associations that are formed as nonprofit corporations. This raises the question: who is our client and who is covered by the Attorney-Client Privilege?
In Oregon, the corporate representatives that are included within attorney-client privilege are principals, officers, directors or persons with authority to obtain professional legal services or act on legal advice rendered. In Washington, the test is whether the corporate representative is authorized to speak for the corporation or holds a management role. It is clear that directors serving on an association board of directors are included within the scope of the Attorney-Client privilege, but owners who are not directors are not included within the privilege. That means that non-director owners can be compelled to testify about facts—even facts that hurt the association’s case—that they learned from the association’s attorney. Obviously, it is in the association’s best interest to prevent that from happening.
The limitations on the scope of the Attorney Client Privilege can be frustrating for unit owners who attend meetings but feel like they are still not getting the full story. It can also be frustrating for board members who seek transparency and would like to get more owner input before making tough legal decisions that impact their community. Unfortunately, preserving the attorney client privilege is necessary, and the amount of information that can be shared is limited in order to protect the association’s ability to have candid discussions with its attorney. On the plus side, frustrated owners can always get the full story by joining their community board of directors. Most communities are always grateful for more volunteers!