Answering the open question of whether pre-litigation communications by attorneys are entitled to the same absolute privilege from defamation claims as litigation communications, the Court of Appeals has just held that they are protected by a qualified privilege instead.  A qualified privilege can be lost by proof that the defendant attorney acted out of malice.  Specifically, in this context, the Court held in Front, Inc. v. Khalil that “the privilege is lost where a defendant proves that the statements were not pertinent to a good-faith anticipated litigation.”

In contrast, an absolute privilege is lost where an attorney’s statements are “so needlessly defamatory as to warrant the inference of express malice.”  Park v. Knoll Assoc. v. Schmidt, 59 N.Y.2d 205 (1983).

Three Appellate Division Departments had addressed the issue arriving at different conclusions.  The First and Second Departments had held that an absolute privilege applied while the Third Department had held that such statements should not be afforded absolute privilege.  The Court of Appeals struck a middle path.

The question was whether the absolute immunity that applies to defamatory statements made by attorneys in connection with judicial proceedings should be extended to pre-litigation statements.  The common scenario discussed by the Court involves cease-and-desist letters sent by attorneys in an attempt to avoid litigation.

The Court concluded that the rationale supporting the application of privileged status to communications made during litigation is also relevant to pre-litigation communications—namely, to encourage attorneys and parties to freely communicate in order to reduce or avoid the need to actually litigate.

However, the Court noted that as a matter of public policy, the courts confine absolute privilege to a very few situations, and the Court concluded that applying the absolute privilege to statements made during pre-litigation communications would be problematic and unnecessary to advance the goals of encouraging communication before litigation.

In holding that the privilege is lost where a defendant proves that the statements were not pertinent to a good-faith anticipated litigation, the Court explained that such a limitation on the privilege is intended to ensure that the privilege does not protect attorneys who are seeking to bully, harass or intimidate their client’s adversaries by threatening baseless litigation or by asserting wholly unmeritorious claims, unsupported by law and fact, in violation of counsel’s ethical obligations.  In this regard, the Court warned in a footnote that counsel communicating with unrepresented parties pre-litigation should exercise caution so as not to step out of bounds, implying that the scope of the privilege might take such things as the unrepresented status of the recipient of the communication into account.