In Chubb & Son v. Superior Court, 176 Cal. Rptr. 3d 389 (Cal. Ct. App. 2014) (No. A140860), the court of appeal held that both the insurer and its outside counsel were allowed to disclose to their respective counsel allegedly privileged information relating to third-party insureds.  Attorney Lemmon was employed by a law firm “captive” of Chubb.  Lemmon filed a wrongful termination case against the captive law firm and against Chubb.  The alleged basis for Lemmon’s termination was poor performance, of which Chubb was aware through privileged communications with Chubb’s insureds (Lemmon’s clients), which were in Chubb’s files and referenced in Chubb internal memoranda. Chubb argued that neither it nor Lemmon should be allowed to disclose this privileged information to their respective counsel on the grounds that such disclosure would violate the insureds’ privileges.  The effect would be that Chubb would assert privilege without first showing the documents to its litigation counsel, and Lemmon would not be allowed to discuss the basis for her termination with her personal attorneys.  The trial court rejected Chubb’s arguments, and the appellate court affirmed.  The appellate court cited prior cases that established that in-house counsel has the right to bring wrongful termination actions, and in so doing has the right to use otherwise privileged information, so long as the plaintiff is careful to use only what is reasonably necessary, and the courts use case-specific mechanisms to prevent unnecessary public disclosure of privileged material.  The appellate court held that the same rule applied to outside counsel.  The appellate court also rejected the notion that the parties should be prohibited from showing third parties’ privileged materials to their respective counsel.  As to Chubb, the court could find no basis for Chubb’s position that it could refuse to show its own documents to its litigation counsel, who was responsible for complying with discovery demands.  The court held that Lemmon could show her own counsel the materials on three grounds:  the disclosure to counsel would not be public disclosure; the disclosures would be limited to what was reasonably necessary for evaluation of the matter; and her counsel was prohibited by ethical duties from disclosing the privileged information to others without her consent.