Does a "fiduciary exception" to the attorney-client privilege exist with respect to ERISA fiduciaries and, assuming it does, does it apply to an ERISA fiduciary that merely sells policies to health benefit plans? Skipping over the existential question, the Third Circuit held today that the exception, if it does exist, doesn’t cover fiduciaries that act as purveyors of insurance policies. Wachtel v. HealthNet, Inc., Nos. 06-3031 & 06-3032 (3d Cir. Apr. 2, 2007).
For those of you unfamiliar with the fiduciary exception, it lifts the veil of confidentiality for attorney-client communications that involve clients who seek legal advice concerning their discharge of fiduciary obligations. The exception treats the beneficiaries as the true client, who thus may obtain discovery regarding communications between counsel and the fiduciary.