Multi-defendant criminal investigations present a classic prisoner’s dilemma. The parties would benefit from cooperating with one another but are incented to become adversaries, most often due to a lack of information sharing and resultant lack of trust and transparency. Fortunately, the law provides a tool: the common-interest privilege, which enables parties to share information in aid of their common defense while maintaining attorney-client and work-product privileges over the shared information.

Yet even the closest of allies can later turn against one another, leading to a common-interest breakup. What, then, of the information that was shared while the parties were united? And what duties might counsel for one party owe to another because of that sharing?

These questions and others are best addressed at the outset of a common defense via a written joint-defense agreement. Experienced counsel can guide defendants through these issues, thereby maximizing the benefits of a joint defense while minimizing the risks.

How do we get in?

Practitioners should first assess whether their clients do in fact have a common interest and should memorialize that interest in the written JDA. Caution is warranted here, however, as courts are split on whether the text of the JDA itself is privileged, so counsel should assume that the JDA could be subject to later disclosure.

Counsel and their clients should also set forth procedures for adding additional parties to the JDA. These provisions should address the nature of the consent required and how consent will be documented. Sometimes, parties may be unwilling to enter into global JDAs, which may result in certain defendants (particularly corporate defendants or targets) finding themselves in multiple JDAs. Counsel should consider how they will ensure shared information from one JDA is kept from participants in any other JDA, and should evaluate whether the JDAs should include additional provisions addressing this issue.

How do we get out?

Just as important are withdrawal and termination procedures. Once parties become adversaries, their common-interest privilege disappears, and new information shared between them loses its attorney-client and work-product privilege. JDAs should therefore include specific provisions regarding how parties can leave the JDA, including when such termination is mandatory, what notice is required, and what materials must be returned. Additionally, the agreement should make clear that information that was shared during the course of the common defense remains subject to the agreement, despite termination of one party to the JDA (with an important exception, noted further below).

There are multiple reasons a party might decide to leave a JDA, but the most common is when that party has determined that its interest is best served by cooperating with the government. Withdrawal in these circumstances is mandatory, and counsel should consider what sort of notice provisions are appropriate for cooperating clients. 

Counsel for the cooperating client must also proceed with caution when interfacing with the government to ensure that the cooperating client and counsel do not disclose privileged information to the government. Doing so is complicated by the fact that JDAs usually prohibit signatories from disclosing even the existence of the JDA to any third party, including the government. Counsel for co-defendants-turned-cooperators will have to carefully consider how to draw lines around their client’s cooperation without revealing privileged information.

How do we avoid disqualification of counsel?

Joint defenses are rife with the potential for disqualification of counsel. Most often, disqualification issues arise when courts find that a common-defense strategy created an implied attorney-client relationship between counsel and a co-defendant, or when courts find that counsel for one co-defendant owes fiduciary duties to another co-defendant by virtue of the joint defense. If a co-defendant then turns government witness, counsel may be prevented from being adverse to the former co-defendant.

These issues make written JDAs critical. The common-interest privilege operates automatically and does not itself require any written agreement. But the potential creation of fiduciary or ethical duties between counsel for one co-defendant and others can plant landmines best disarmed by various JDA provisions.

The guiding principle for these provisions is protection of counsel’s ability to defend its client and to maintain independence over that representation, regardless whether other members of the JDA later opt to cooperate with the government. To that end, the JDA should be signed by counsel and their clients, leaving no doubt that clients have reviewed the agreement and consented to its terms.

In this vein, the JDA should make clear that each counsel has advised his or her client about the terms of the JDA, and that counsel and the clients agree that the clients understand the terms and have entered the agreement knowingly and voluntarily. Further, the JDA should specify that each client agrees that it is represented by only its own counsel and not counsel for any other client. The JDA should make explicit that counsel for each client owes fiduciary duties only to their own client and to no other. The clients should expressly waive any claim that any other counsel owes them duties under the JDA. Additionally, the agreement should provide that withdrawing parties waive any conflict-of-interest claim against counsel for parties remaining in the JDA, and that withdrawing parties will not seek to disqualify counsel for any remaining party.

Finally, the JDA should set forth the narrow circumstances under which a party that has withdrawn from the JDA can have its privileged information used against it. Specifically, the JDA should provide that a signatory to the JDA who later withdraws from the agreement and testifies against another member of the JDA consents to the use of information during cross-examination that was previously shared by that party while they were a member of the joint defense. These provisions are not designed to be punitive against cooperators. They are instead necessary because counsel have been disqualified from representing defendants where such representation required cross-examination of former JDA members, but where counsel’s cross-examination was hamstrung by JDA obligations that prevented a full and vigorous defense. The JDA should thus provide, for example, that a witness can be cross-examined with prior inconsistent statements made during the course of the JDA and the agreement should expressly provide that the parties consent to such use of their shared information.

Other key provisions

JDAs should also make clear that parties retain the right to share their own information with third parties and that sharing of information that is not privileged (like facts) does not create privilege over that information. Additionally, JDAs should expressly provide that parties to the JDA are not required to share any information whatsoever; clients and their counsel retain the right to independently determine when it is in their best interest to do so.

The common-interest privilege helps co-defendants navigate their prisoner’s dilemma, but it does not solve the issues that lurk when joint defenses fall apart. A written JDA—with the right provisions—enables parties to fully utilize their common-interest privilege while protecting the client’s choice of trusted counsel.