By: Thomas S. Tripodianos Published: May 2010

Are the documents relating to the latter "privileged" so that in the context of litigation they need not be produced to the contractors making claims?

Question. The parties are involved in a dispute over defects and delays in the construction of a very large commercial project. The Owner of the project retained a consulting firm under two different contracts to perform two different services: (a) to provide construction management services, and (b) to assist counsel by reviewing and analyzing claims submitted by various contractors. Are the documents relating to the latter “privileged” so that in the context of litigation they need not be produced to the contractors making claims?

Answer. YES. The two groups of documents were created by different entities operating under different contracts and performing different services. Documents created at the request of Owner’s counsel for claims analysis and possible litigation position are protected under the work-product doctrine.

The Owner’s construction management contract with the consultant charged the consultant with implementing and enforcing the Owner’s procedure for the processing of Change Orders and analyzing and evaluating all claims for contract time extension or cost adjustment and making recommendations for resolution, approval, or disapproval.

The Owner’s claims analysis contract charges the "Claims Analysis Group" to perform "claims analysis." The contract requires that the Claims Group provide Owner with a preliminary claims analysis in order to identify project delays and damage claims.

The work product doctrine, provides that a party may not discover documents and tangible things that are prepared in anticipation of litigation or for trial by or for another party or its representative (including the other party's attorney, consultant, surety, indemnitor, insurer, or agent) unless it can demonstrate a substantial need for the materials to prepare its case and cannot, without undue hardship, obtain their substantial equivalent by other means.

The most contested condition necessary for work product protection is that the material at issue was prepared "in anticipation of litigation." A document is prepared "in anticipation of litigation" if in light of the nature of the document and the factual situation in the particular case, the document can fairly be said to have been prepared or obtained because of the prospect of litigation. Under the work product doctrine, if a document is created because of the prospect of litigation, analyzing the likely outcome of that litigation, it does not lose protection merely because it is created in order to assist with a business decision. However, there is no work product protection for documents that are prepared in the ordinary course of business or that would have been created in essentially similar form irrespective of the litigation. Even if such documents might also help in preparation for litigation, they do not qualify for protection because it could not fairly be said that they were created "because of" actual or impending litigation.

Work product protection may be waived by the conduct of a party. Courts applying this "fairness doctrine" have found, that for example, where a party selectively discloses certain privileged or work product material, but withholds similar (potentially less favorable) material, principles of fairness may require a more complete disclosure.

The Consultant Claims Group and the Consultant Construction Management Group performed different services. The ordinary review of contractor payment requests performed by the Consultant Construction Management Group involved contact with the contractors. By contrast, the claims analysis performed by the Consultant Claims Group involved no construction management work and no contact with contractors. Unlike the Consultant Construction Management Group, the Consultant Claims Analysis Group's analysis was provided directly to Owner’s general counsel. The Consultant Construction Management Group performed services that were ongoing for the duration of the construction project; by contrast, the Consultant Claims Group's work involved a short-term assignment. The documents at issue are the result of requests by Owner's attorneys for claims analysis including a particular possible litigation position.

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