imprudent to craft an evidentiary privilege in such a way as to require the difficult task of defining fiduciary obligations to be met at the discovery stage. Moreover, when dealing with the attorney-client privilege, courts must be particularly careful not to craft rules that cause application of the privilege to turn on the answers to extremely difficult substantive legal questions. “An uncertain privilege, or one which purports to be certain but results in widely varying applications by the courts, is little better than no privilege at all.” Upjohn, 449 U.S. at 393. We are reluctant to ask lawyers to read tea leaves and predict how courts will resolve the imponderables of ERISA before they can take the most preliminary step of advising their clients as to whether their communications will remain confidential.
We note a certain paradox inherent in any application of the fiduciary exception to an insurer which is acting as a fiduciary in deciding claims under an ERISA plan. The need for the attorney-client privilege is at its height where the law with which the client seeks to comply is complicated and the penalties for noncompliance are great. Cf. id. at 392 (noting that corporations have a strong need for confidential legal advice because of the complicated legal rules confronting them). ERISA is an enormously complicated statute. An entity’s ability to secure confidential legal advice should not be at its lowest when complex legal obligations are at their highest. Although this problem arises whenever the fiduciary exception applies to an ERISA fiduciary, its undesirability should counsel against overzealous extension of the exception.
Second, an expansive and uncertain attorney-client privilege for insurer-fiduciaries will cause insurers to reevaluate