Corporate Attorney-Client Privilege in Health Care

February 17, 2014

Can a Hospital’s Attorney Interview a Plaintiff’s Treating Physicians?

Once a lawsuit is initiated, defense attorneys are not allowed to interview a plaintiff’s treating physicians for information related to the lawsuit. A new Washington Supreme Court decision, however, attempts to balance a hospital or clinic’s obligation to investigate patient safety concerns with patient confidentiality and holds that a hospital’s attorney may interview treating physicians as part of an investigation.

Imagine a patient files a lawsuit against a hospital or clinic for alleged negligence in medical treatment. The corporate hospital or clinic directs its in-house counsel or retains defense counsel to investigate the event and defend the suit. As part of this investigation, in-house and/or defense counsel interview the providers who treated the patient at the center of the issue. At this point, the investigation runs into a snag because the defense attorneys are prohibited from interviewing the plaintiff’s treating providers about the medical treatment provided without providing the plaintiff an opportunity to be present.

Situations like the one described above involve balancing competing interests. On one hand, a corporate hospital or clinic should be able to interview its provider-employees in order to investigate patient safety issues and defend lawsuits. On the other hand, injured patients have a right to supervise nonparty provider communications with defense counsel in order to ensure otherwise sensitive information is not disclosed.

The Washington Supreme Court recently attempted to strike a balance between these two interests in Youngs v. Peacehealth. In that case, the court held that an attorney hired by a corporate defendant to investigate or litigate a patient lawsuit is allowed to interview the corporation’s physician-employees where the physician-employee has firsthand knowledge of the alleged negligent event and where the communications are limited to the facts of the alleged negligent event. This decision, while not the law in Wisconsin, may give hospitals and clinics the ability to fully investigate an event without fear of infringing on patient confidentiality.

This case involves the intersection between attorney-client privilege, corporate communications and patient confidentiality. Some background on these principles will help to understand this decision and its potential ramifications.

Typically the attorney-client privilege is simple to understand: communications between a client and his or her lawyer are confidential. It is less simple when the client is a corporation. In Upjohn Co. v. United States, the United States Supreme Court held that corporations, like individuals, enjoy the protections of the attorney-client privilege. In that same decision, the Court held that the privilege does not only apply to attorney’s communications with corporate managers, but rather extends to attorney communications with certain other employees, as well.  The Court reasoned that in the context of corporate liability, certain low and mid-level employees might be the only source of information relevant to the liability defense. Without speaking to these employees, the Court reasoned, corporate counsel “may find it extremely difficult, if not impossible, to determine what happened” to trigger potential corporate liability. Many corporations have relied upon the Upjohn decision for assurance that their attorneys’ communications with their employees are protected by the attorney-client privilege.

At the same time, many states (including Wisconsin) have a judicially-created rule which bars defense counsel from speaking to a plaintiff’s treating physicians without the plaintiff’s knowledge. The rationale for this rule is patients should be allowed to supervise conversations with their providers to ensure otherwise irrelevant and confidential medical information is not disclosed.

The conflict arises when defense counsel need to speak to physician-employees in order to investigate and defend lawsuits against the hospital or clinic. This conflict came to a head in Young, which was actually a consolidation of two cases involving the same issues. In both cases, patients sued a hospital for medical malpractice based on the conduct of its physician-employees. Early in the respective lawsuits, the patients sought an order from the trial court barring the hospital or its attorneys from speaking to other providers who observed the plaintiff’s care. The two cases were certified to the Washington Supreme Court for a decision on whether the corporations’ right to speak to its employees or the patients’ right to confidentiality would carry the day.

In its decision, the Washington Supreme Court split the difference. The court adopted “a modified version of the Upjohn test” and held that an attorney hired by a defendant health care provider to investigate or litigate an alleged negligent event may speak to a plaintiff’s nonparty treating physician only where the communications would otherwise be covered by the attorney-client privilege, where the physician observed the alleged negligent events, and where the communications only concern the facts of the alleged negligent event. In other words, a hospital or clinic can retain an attorney to speak to an injured patient’s physicians, but can only discuss the events giving rise to the injury.

The court made clear “the facts of the alleged negligent incident” do not include health care provided before or after the event triggering litigation. “This is true even where such care bears on the issue of damages.” The court observed its ruling “strikes the proper balance between the attorney-client and physician-patient privileges,” limiting the latter to the extent necessary to protect a corporation’s right to fully investigate potential liability.

To be sure, this rule is not the law in Wisconsin. In Wisconsin, defense counsel still may not engage in ex parte “discovery” with the plaintiff’s treating physicians. In Steinberg v. Jensen, the Wisconsin Supreme Court held that absent consent from the plaintiff-patient, a defense attorney who wants to speak to a treating physician must do so in the plaintiff’s presence. It is unclear whether Wisconsin courts would allow a hospital or clinic’s attorney to interview other treating physicians under the same rationale as in Young. Nonetheless, the Young decision is an important step toward helping hospitals and clinics fully investigate patient safety concerns while ensuring patient confidences.

Youngs v. Peacehealth, No. 87811-1 (WA, Jan. 23, 2014)

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