The Department of Justice's Revised Waiver Policies Under Deputy Attorney General Paul J. McNulty: An Overview and Critique

For corporations facing the crush of parallel private and government litigation the problem of privilege waiver continues to loom large. The incentive to cooperate with the government in its prosecution of alleged wrongdoing is as simple as it is compelling: the non-cooperator can expect no favors in either the investigatory or litigation phases of the government’s case, and can instead count on rough handling in matters as diverse as routine scheduling, settlement and plea negotiations and charging recommendations. Cooperation, though, continues to implicate considerations of waiver. Depending on when you ask the question, full cooperation in the eyes of the officials who set policy at the Department of Justice (“DoJ”) and the Securities and Exchange Commission (“SEC”) may include “voluntary” waiver of the attorney client privilege and work product protection. But waiver for the company defending parallel private and government actions usually presents a classic Hobson’s choice: cooperate with the government at the expense of privilege in the civil case, or decline to cooperate with the government, with all the implications for the criminal or regulatory action that decision entails.