In an important decision released on February 23, 2011, the Pennsylvania Supreme Court held, in Gillard v. AIG Insurance Company, that under Pennsylvania law “the attorney-client privilege operates in a two-way fashion to protect confidential client-to-attorney or attorney-to-client communications made for the purpose of obtaining or providing professional legal advice.” This ruling has great importance to Pennsylvania attorneys and litigants alike. Prior decisions of the Pennsylvania Superior Court held that the privilege was only a one-way street. Most recently, in 2007, the Pennsylvania Superior Court declared, in Nationwide Mutual Insurance Company v. Fleming, that the privilege protects “only ... confidential communications made by the client to counsel.” 924 A.2d 1259, 1269 (Pa. Super. 2007), aff’d on other grounds by an equally divided court, 992 A.2d 65 (2010) (emphasis in original). In Gillard, the Supreme Court expressly overruled Nationwide and has now firmly established that the attorney-client privilege applies to all communications between attorney and client, provided that they were made for the purpose of obtaining or providing professional legal advice.

The Supreme Court in Gillard recognized the prior inconsistency in the law and opined that “the disharmony relates to the ongoing tension between the two strong, competing interests-of-justice factors in play – namely – the encouragement of trust and candid communication between lawyers and their clients ... and the accessibility of material evidence to further the truth-determining process.” The Court reasoned that “if open communication [between clients and counsel] is to be facilitated ... a broader range of derivative protection is implicated.” Further, the Court recognized that it can be difficult for courts to “unravel attorney advice from client input” in the course of reviewing and interpreting attorney-client communications. It acknowledged “the need for greater certainty to encourage the desired frankness” of communication between counsel and client.

The attorney-client privilege in Pennsylvania has long been codified in a statute, 42 Pa.C.S. § 5928, which provides:

5928. Confidential communications to attorney

In a civil matter counsel shall not be competent or permitted to testify to confidential communications made to him by his client, nor shall the client be compelled to disclose the same, unless in either case this privilege is waived upon the trial by the client.

Appellee William Gillard, who brought the action alleging bad-faith handling of his uninsured motorist claim, took the position that Section 5928 is very limited and applies only to confidential communications initiated by the client. The Supreme Court rejected this argument on the grounds that Pennsylvania courts had already recognized so-called “derivative protection” for some confidential communications from attorney to client – that is, for those communications from attorney to client that if disclosed would reveal confidential facts initially disclosed by the client to the attorney – and therefore found it “essential to consider the underlying purpose of the privilege.” The Court did not, however, describe the purposes of the privilege. Instead, it stated that “we appreciate that client communications and attorney advice are often inextricably intermixed, and we are not of the view that the Legislature designed the statute to require ‘surgical separations’ and generate the ‘inordinate practical difficulties’ which would flow from a strict approach to derivative protection.”

Five justices joined the majority opinion in Gillard and two justices dissented. Justice McCaffery dissented on the grounds that the majority ignored the plain language of the statute and “decades of decisional law faithful to the statutory text ....” Justice Eakin dissented on the grounds that the majority’s ruling could be used in an extreme case to protect from disclosure highly relevant communications from attorney to client, and that it violates the principle that privileges must be strictly construed and limited because they contravene the “fundamental principle that ‘the public has a right to every man’s evidence.’”

Gillard brings Pennsylvania squarely within the overwhelming majority of states that recognize the great societal benefit afforded by promoting frank and open communication between clients and counsel. Those states have adopted a broad view of the privilege as encompassing all communications between clients and counsel for the purpose of seeking or providing legal advice, without limitation on which party initiates the communication.

Gillard offers benefits to attorneys and clients in Pennsylvania. The broader scope of the privilege will better enable counsel to provide legal advice to clients, enabling them to advise and indeed encourage compliance with the law without the prerequisite of a specific inquiry from the client. It will facilitate open dialogue between attorneys and clients, resulting in more active involvement from counsel in ensuring legal compliance, with attendant benefits to society as a whole.