Banking and Finance Law Report

Financial institutions' lawyers working in Ohio (and their clients) should take note of an important development regarding the law of attorney-client privilege. On December 20, 2012, Governor John Kasich signed into law Amended Substitute House Bill 461, which makes important changes to Ohio's attorney-client privilege statute, R.C. 2317.02(A)(1). 

Until recently, Ohio's attorney-client privilege statute stated that the attorney-client privilege would prevent an attorney from testifying in deposition or at trial except "by express consent of the client or, * * * if the client voluntarily testifies, * * * the attorney may be compelled to testify on the same subject."  (Emphasis added.)  This language gave rise to two, somewhat controversial principles of Ohio privilege law. 

First, the Supreme Court of Ohio has held for over 150 years that the statutory privilege is waived whenever a client "voluntarily testifies" – not just when the client voluntarily testifies about the substance of a privileged attorney-client communication.  Although few Ohio lawyers were aware of this line of precedent, it had been followed several times in Ohio's appellate courts and as recently as 2008.  Second, the Supreme Court of Ohio has held repeatedly that "R.C. 2317.02(A) provides the exclusive means by which privileged communications directly between an attorney and a client can be waived."  Thus, the Court has held that the statutory attorney-client privilege would not be waived "even when the client has told a third person what was discussed."  Both of these holdings are contrary to common sense and to Ohio and federal courts' application of the attorney-client privilege at common law.

H.B. 461 overrides this precedent by changing the language of R.C. 2317.02(A)(1).  The attorney-client privilege statute no longer states that an attorney may be compelled to testify if his or her client "voluntarily testifies."  Instead, the statute now states that an attorney may be compelled to testify if his or her client "voluntarily reveals the substance of attorney-client communications in a nonprivileged context[.]"  Hence, divulging a privileged attorney-client communication to a third person will now waive the statutory privilege.  With this new language, the Ohio Legislature has brought Ohio's statutory privilege more into line with the common law and resolved two longstanding absurdities in Ohio privilege law.