Monday, June 21, 2010

Recent arbitration decision may jeopardize attorney-client privilege

A recent Florida arbitration decision grants condominium owners the right to inspect an attorney’s legal opinion when the decision to seek that legal advice was made at an open board meeting. The arbitrator took the position that since the decision to seek a legal opinion on whether or not adopting a proposed budget required unit owner approval pursuant to the association’s Bylaws was discussed at length in a public forum, there was no expectation that the opinion ultimately rendered would not similarly be open to inspection.

There is a delicate balance between protecting the members’ right to know everything that goes into operating and administering their community while also protecting the association’s ability to pursue its legal rights on behalf of the membership.

An opinion regarding how the budget should properly be adopted doesn’t bear the same need for privacy that a legal opinion regarding the best way to pursue a developer for construction defects would. Obviously, jeopardizing attorney-client privilege and disclosing potential legal strategy in the latter case would be devastating to the association’s ability to pursue that claim and would hurt the very owners seeking its disclosure.

Time will tell whether or not this arbitration decision will be overturned. In the interim, boards discussing the need for legal opinions in matters that could lead to litigation would be well advised to make the vote to request that opinion a matter of procedure without lengthy discussion and with the caveat that the association has no intention to waive privilege of the opinion being sought.

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