The Texas Supreme Court considered whether communications between the insurer's lawyer and the employer of the injured employee were privileged. See In Re XL Spec. Ins. Co., 2012 Tex. LEXIS 568 (Tex. June 20, 2011).
XL was Cintas Corporation's workers' compensation carrier. XL's policy required Cintas to cooperate in the investigation, settlement and defense of a claim.
An injured employee of Cintas sought workers' compensation benefits, but XL denied the claim. During an administrative hearing, the hearing officer determined the injured employee sustained a compensable injury and was entitled to medical and temporary income benefits. XL's counsel sent communications about the status and the evaluation of the proceeding's to Cintas.
After the workers' compensation dispute was resolved, the injured worker sued XL for bad faith. The injured employee sought the communications between XL's counsel and Cintas. XL argued the communications were privileged. The trail court held the privilege did not apply.
On appeal, the Texas Supreme Court focused on Rule 503 (b) (1) (C), which is identical to Haw. R. Evidence, Rule 503 (b) (4). The rule provides communications between representatives of the client or between the client and a representative of the client are privileged. The Court denoted this the "allied litigant" privilege. Texas also required that the privileged communication be made in the context of a pending action.
The allied litigant privilege protected communications between a client, or the client's lawyer, to another party's lawyer, not to the other party itself. Here, XL was the client and the communications were between XL's lawyer and a third party, Cintas, who was not represented by XL's lawyer and who was not a party to the litigation. Accordingly, the privilege did not apply.
