journal of pension planning & compliance - Kluwer Law International

24 / JOURNAL OF PENSION PLANNING & COMPLIANCE
Although the privilege generally will not apply where a lawyer,
either intentionally or unintentionally, represents more than one party
with respect to an employee benefit plan and litigation between those
parties ensues, a line of cases holds that, even if a plan fiduciary and the
plan’s participants would otherwise be deemed joint clients of an attorney,
the joint-client exception does not extend to communications of
the plan fiduciary on nonfiduciary matters such as “settlor functions”
the fiduciary may perform in its capacity as plan sponsor. 55 For these
purposes, multiple clients concurrently represented with respect to the
same plan may not be at all times and for all purposes “co-clients” or
“jointly” represented.
THE ATTORNEY-CLIENT PRIVILEGE
IN FIDUCIARY REPRESENTATION
ERISA codifies and modifies certain trust law principles that apply
to those responsible for the management and operation of employee
benefit plans, the plan fiduciaries. 56 Fiduciaries must act solely in the
interests of plan participants when engaged in plan administration—for
example, investing plan assets, deciding benefit claims, or communicating
with participants about the plan—but not if and when they perform
“settlor functions” such as establishing, amending, or terminating
a plan. 57 Employer and union plan sponsors and trustees of jointly
administered plans engage in both settlor and fiduciary activities, and a
lawyer may advise a client acting in both capacities.
A lawyer advising about employee benefit plan management or litigation
must take care to identify the client and clarify to those involved
whether the plan, the plan sponsor, the trustee or other fiduciary, the
participants, or some or all are clients. 58 In the absence of clarification,
the identity of the client “may depend upon the circumstances and the
law of the jurisdiction.” 59 In ERISA litigation, a number of courts have
held that the attorney-client privilege does not protect communications
between counsel and a party being advised in a fiduciary capacity from
being disclosed to plaintiff plan participants. Two theories have been
advanced in support of a fiduciary exception to the privilege—one
requiring a showing of “good cause” for disclosure, the other not. A
number of cases have also sought to set limits on the fiduciary exception
to the attorney-client privilege.
Cases Where Good Cause Was Required
One theory for recognizing a fiduciary exception to the attorneyclient
privilege derives from a corporate law case, Garner v. Wolfinbarger,
60 which held that, “where the corporation is in suit against its