The defense claims that conduct was undertaken in reliance on counsel's advice, negating willfulness, bad faith, or knowledge. Asserting it places the advice at issue and waives privilege over the communications and often the broader subject matter.
Elements typically require full disclosure to counsel and actual reliance.
Alternative Names:
Reliance on Counsel, Good Faith Reliance Defense
Why it Matters?
The waiver is the reason this defense is asserted less often than its apparent value suggests, since raising it opens counsel's file including any advice the party disregarded. In bad faith litigation a carrier asserting reliance on coverage counsel produces the entire coverage analysis. The decision requires knowing what the privileged file actually contains, which means reviewing it before deciding rather than after.
Frequently Confused with
Related terms
Frequently asked questions
What does asserting the defense waive?
When should the decision be made?
