Relates to the privilege for confidential communications by a personal representative or an attorney

Title of bill

An act to amend the civil practice law and rules, in relation to the attorney-client privilege

Purpose

To clarify in statute the existing case law relative to the inference which a trier of fact may draw when a beneficiary objecting to an accounting is met with a claim of attorney-client confidential privilege.

Summary of provisions

CPLR 4503(a) is amended to add a new subdivision iii which provides that where the privilege for confidential communications is asserted, the trier of fact may draw the strongest inference against the personal representative that the opposing evidence in the record permits.

The present bill also makes a technical correction to the 2002 amendment to clarify that the protection of the attorney-client privilege extends to trustees of lifetime trusts.

Existing law

Case law permits this inference, see Commissioner of Social Services v. Philip De G., 59 N.Y.2d 137, 141 (1983). In light of the 2002 statutory change, placing the inference in statute provides additional clarity to litigants, advocates and the court.

Justification

Until 2002, a beneficiary who objected to the accounting of a fiduciary (executor, administrator, or trustee) was entitled, despite the claim of attorney-client privilege, to require the disclosure of communications between an attorney and such fiduciary concerning the administration of the estate or trust, where there was a "showing of good cause", i.e., where such disclosure was necessary to the establishment of the claim of the beneficiary. Hoopes v. Carota, 74 NY2d 716 (1989).

As stated by Professor Alexander in the McKinney's Commentaries to CPLR 4503 (C4503:5), this so-called "fiduciary exception" of Hoopes v. Carota

"has been largely eliminated with respect to communications between counsel and the personal representatives of decedents' estates (including testamentary trustees). A 2002 amendment to CPLR 4503 adds a new subdivision (2) to paragraph (a) providing that the beneficiary of an estate is not entitled to have access to privileged communications between the personal representative of the estate and the representative's attorney merely because a fiduciary relationship exists between the representative and the beneficiary. CPLR 4503(a)(2) (A)(ii). The new provision also explicitly states that a beneficiary is not, solely because of his or her beneficiary status, the client of the personal representative's attorney. CPLR 4503(a)(2)(A)(i)."

The basic rationale of the 2002 amendment was that fiduciaries should be able to consult with their attorneys on the same basis as other clients. Moreover, the sponsors of the 2002 amendment specifically stated as a reason in support of the amendment that the interests of the beneficiaries were protected by, inter alia, the ability of the fact finder to draw an adverse inference against the fiduciary if the fiduciary asserted the attorney- client privilege to prevent disclosure of relevant communications. In order to balance the interests of the beneficiaries with those of the fiduciary, the present bill makes clear that such adverse inference may be drawn by the finder of fact, and specifically describes the inference in the terminology employed by the New York Court of Appeals in Commissioner of Social Services v. Philip De G., 59 N.Y.2d 137, 141 (1983).

The present bill also makes a technical correction to the 2002 amendment to clarify that the protection of the attorney-client privilege extends to trustees of lifetime trusts.

Legislative history

2007-08, S.1971, Passed Senate both years 2005-06, S.4701

Fiscal implications

None.

Effective date

Immediately.