THE ETHICS OF REPRESENTING DEBTORS AND CREDITORS IN BANKRUPTCY

D. The Joint Defense or Common Interest Doctrine in Bankruptcy.

1. Communications between an individual and an attorney for another, or between attorneys for two parties, are protected by the privilege where they are part of an ongoing and joint effort to set up a common defense strategy. The communications must have been made in the course of a joint defense effort, designed to further that effort, and not be in a context in which the privilege otherwise was waived or inapplicable.⁴⁷⁶ The parties' common interest must be identical, not similar, and must be legal, not commercial.⁴⁷⁷ This privilege does not apply to several parties represented by the same lawyer.⁴⁷⁸ A joint defense privilege generally cannot be waived without the consent of all parties sharing the privilege.⁴⁷⁹
2. If the joint defense ceases, and the interests of the joint parties become adverse, the privilege no longer protects the communications previously made as between the formerly-aligned parties.⁴⁸⁰ Similarly, when a single lawyer represented both parent and subsidiary, the subsidiary's bankruptcy trustee may obtain documents and testimony from the lawyer for both, unimpeded by claims of privilege once the two entities are adverse.⁴⁸¹ Indeed, a bankruptcy trustee may destroy a joint defense privilege with another separately-represented party at the stage of investigating claims aginst that party as well as at the point of suit.⁴⁸² The joint defense doctrine may be used as a sword, to obtain information from another party's counsel on the basis that the attorney was jointly representing the deposing party.⁴⁸³ The privilege would continue, however, as to third parties, and even when the joint defendants simply have a falling-out or divergence of interests, as long as they do not actually oppose each other in litigation.⁴⁸⁴ Even the trustee-successor to one of the former joint defendants may not unilaterally waive the privilege to enable access to third parties.⁴⁸⁵
3. As an ethical matter, a lawyer acting as an intermediary between clients must consult in advance with each concerning the implications of common representation, including the effect on the attorney-client privileges, and obtain the consent of each to common representation.⁴⁸⁶ In a common representation, an attorney must keep both clients adequately