On April 14, 2026, the First Department issued a decision in Prospect Capital Corp. v. Morgan Lewis & Bockius LLP, 2026 NY Slip Op. 02220, holding that a party waived the attorney-client privilege by placing its reliance on counsel’s advice at issue, explaining:
In this legal malpractice case, Supreme Court providently denied plaintiff’s motion for a protective order as to categories 15, 19, and 20 of its privilege log, limiting disclosure of category 19 solely to advice related to Prospect’s choice to bring the turnover claim, because plaintiff had waived the attorney-client privilege and work product privilege by reason of the at-issue doctrine. As this Court previously stated, the issues in this case involve whether defendants’ alleged malpractice leading to the loss of a cause of action under the turnover provision of the subordination agreement caused Prospect damages. As to categories 15, 19, and 20, plaintiff has placed at issue the communications from in-house counsel regarding the turnover provision, its interpretation, and the decisions of whether or when to litigate against nonparty Silicon Valley Bank, because plaintiff has alleged that it relied on defendants’ advice in formulating its negotiation and litigation strategy. The communications sought were made concurrently with the representation” by defendants and were relevant to establishing alleged reliance on their advice. The privilege based on work product may also be waived by reason of the at-issue doctrine.
On the other hand, Supreme Court providently granted plaintiff’s motion for a protective order as to categories 6, 9, 10, and 12 of its privilege log. The communications at issue, involving other contracts and amendments in the same transaction, are not relevant to whether plaintiff relied on defendants’ advice regarding the turnover provision.
(Internal quotations and citations omitted).