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WA Supreme Court Extends Corporate Attorney-Client Privileges

December 3, 2020

Overview

On November 12, 2020, the Washington Supreme Court extended corporate attorney-client privilege protection to appropriate ex parte communications between defendant hospitals and their non-employee agents. The court’s decision in Hermanson v. MultiCare Health Sys., Inc. held that corporate attorney-client privilege allowed a defendant hospital to protect from discovery ex parte communications with a nonparty treating physician because that physician was the functional equivalent of a hospital employee.

Since its prior decision in Young v. PeaceHealth, the court has maintained that “the attorney client privilege trumps the physician-patient privilege when the hospital needs to gather information about [an] alleged negligent event.” Hermanson v. MultiCare Health Sys., Inc. The court’s decision in Hermanson directly addressed whether the attorney-client privilege in a corporate setting extends to non-employee agents of a hospital. The court reasoned that where a corporation maintains a principal-agent relationship with a non-employee agent, primarily by maintaining the right to control the details of the agent’s work, that agent is the functional equivalent of an employee and thus the hospital’s attorney’s ex parte communications with that agent are covered by the corporation’s attorney-client privilege.

For defendant hospitals dealing with malpractice litigation, and potentially other litigation, the Hermanson holding is significant because it permits privileged ex parte communications with non-employee hospital agents, such as independent contractors and medical staff members who are not hospital employees, as long as those communications are limited to “the facts surrounding the alleged negligent event.” Id. at 9.

Schwabe’s healthcare attorneys are continuing to monitor this issue. If you would like to explore how this ruling may affect your organization, please contact one of Schwabe’s attorneys.

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