The most comprehensive piece I have read to date on the differences between Quick-Peeks and Clawback Agreements was authored by Ralph Losey (http://bit.ly/kk1V5z). In a careful and thoughtful analysis, he succinctly outlines and clarifies the scope of these agreements, when they should be utilized, and how to draft them to safeguard privileged documents from potential waiver claims. It is recommended reading to improve the knowledge base, because even experienced lawyers are still confused by the two. See also Rule 26 (b) (5) (B), Federal Rules of Civil Procedure, and Rule 502 Federal Rules of Evidence.
Lions and Tigers
In short, using Quick-Peek,the receiving party will have full review of the documents before the producing party. The receiving party, after this full review, will then advise the producing party which documents it considers relevant and wants to keep. The receiving party returns the remaining documents. The main problem here being that privileged documents may be included in those produced to the receiving party, consequently exposing confidential and potentially privileged information; secrets are out, and whatever has been seen cannot be forgotten. Clawback Agreements are like the Quick-Peek, but with one major difference. Under a Clawback Agreement the producing party reviews the documents prior to production. If the producing party inadvertently includes privileged documents, and the producing party later becomes aware of the inadvertently produced—and potentially privileged documents, the party has a second chance to keep his secrets. The producing party can claw them back with a claim of privilege. In both, circumstances, a party is able to redact documents and claim privilege if privileged documents have been inadvertently produced.
The main differentiator is whether a party reviews its documents upfront, thus controlling what is seen initially, or risk opposing counsel performing the initial review and seeing privileged materials. A good analogy can be drawn by the game of poker. Do I withhold the cards I think you need to make your hand, under the assumption I know what you are holding or do I show my cards and wait to see what you pick like go fish? This choice can be made on a case by case basis, but is largely dictated by cost and in-house resources.
In both instances, we are talking about expediting discovery for cost savings and to protect privileged information. My recent interest in Clawback Agreements comes from my attendance at the Superconference in Chicago this year, where Judge Waxse spoke briefly about them. In so many words, he supports them and suggested that lawyers who don’t use them are doing their clients a disservice and could be guilty of malpractice. He sometimes has even required a Clawback Agreement without the agreement of the parties by incorporating the terms of such an agreement into a Protective Order. In Rajala v. McGuire Woods, LLP, 2010 WL 2949582 (D. Kan. July 22, 2010) he issues a Protective Order with the same effect of a Clawback Agreement.
Complex issues are presented where parties are required to make voluminous document productions under strict time limits. These issues include waiver of the attorney client and/or work product privileges through inadvertent production, the federal and state court implications of inadvertent production, as well differing judicial interpretation of agreements designed to minimize the risk of inadvertent production.
On balance, Clawback Agreements are useful and prudent vehicles to manage the risk of large productions and avoid the problem of inadvertent production of privileged documents. However, parties should be reminded that, even when in place, these agreements are no silver bullet solution as they can still be the subject of litigation over the reasonableness of methods employed to prevent disclosure of privileged information or contentions that documents produced are not, in the first instance, privileged communications.
If you take the time up front to make sure that your discoverable information is limited to the minimum amount of non-privileged information and non-work product, then even if the court imposes a Clawback agreement under the guise of an order of protection in the misguided belief that this will protect the producer, then your risk of exposure is reduced dramatically. Given that this theoretical protective halo could result in shorter review times being imposed by the court, any reduction in information before that point is reached is not only desirable, but essential in today’s world of exponential data.
Key Take Away
This presupposes that the organization has an archiving platform and the ability to effectively deploy litigation hold across information for preservation. There is some investment required upfront to get proactively organized, but in the end, it is beneficial. In order to confidently search the archive, certain capabilities need to be brought in-house. Technology and people aren’t perfect. There will be mistakes and that is what Clawback Agreements aim to mitigate, but there are ways to minimize the risk initially and we are seeing more and more companies embrace this philosophy to reduce cost, inadvertent production and to decrease the volume of non-relevant data.