Insurer's Production of Documents to its Reinsurer Waives Privilege

A federal Magistrate Judge in the United States District Court for the Southern District of New York recently ruled in McLean v. Continental Cas. Co., that an insurance company's production of documents to its reinsurer waived any privilege that may have been applicable to those documents. The Magistrate relied on the reasoning articulated in North River Ins. Co., v. Columbia Cas. Co., 1995 WL 5792 (S.D.N.Y. 1995), that "the relationship between insurer and reinsurer is simply not sufficient to give rise to the common interest privilege." In North River, the Court held that a "common interest (between an insurer and reinsurer) cannot be assumed merely on the basis of the status of the parties." Rather, the Court will look at a variety of factors, including whether the insurer and reinsurer are represented by the same counsel, whether the reinsurer contributes to the insurer's legal expenses or exercises any control over the conduct of the underlying proceedings and the extent to which the interests of the insurer and reinsurer are compatible or antagonistic.