In a recent discovery ruling,1 the US District Court for the Southern District of New York addressed the limits of attorney-client privilege and document redactions in an ongoing dispute between Mandarin Oriental and its insurers, HDI and Generali. The case involves claims for business interruption losses arising from the COVID-19 pandemic.
Mandarin challenged the insurers’ decision to redact substantial portions of internal communications and attachments, arguing that many of the withheld materials were factual or business-related in nature rather than privileged legal advice. The court reviewed a sample of these documents in camera (i.e., privately) and issued a detailed ruling clarifying what may and may not be withheld.
The court upheld redactions where documents reflected actual legal advice, such as summaries of outside counsel’s opinions or internal references to specific legal conclusions. For example, a section titled “Coverage Counsel Conclusion” and a formal legal memorandum from external attorneys were found to be appropriately protected by attorney-client privilege.
However, the court ordered the insurers to produce all other portions of the documents, including communications among non-lawyers and attachments that did not contain legal analysis. For example, communications concerning business strategy, factual details, internal signoffs, and claim handling were held to fall outside the scope of privilege.
The court emphasized that simply involving counsel or referencing legal risk does not automatically shield communications from discovery. Additionally, the court reiterated that the work product doctrine does not protect materials prepared in the ordinary course of business. Documents generated well in advance of any anticipated litigation (particularly more than one year before the lawsuit was filed) were not entitled to protection under that standard.
This ruling is important for both policyholders and insurers. It clarifies that attorney-client privilege is limited and cannot shield routine business communications. While legal advice remains protected, insurers cannot broadly withhold internal evaluations of claims. The decision improves policyholders’ access to key insurer communications and reminds insurers to clearly separate legal advice from business matters and apply redactions carefully.
We will continue to monitor this litigation and similar rulings that shape the scope of privilege and discovery in insurance coverage disputes.
If you have any questions regarding the content of this alert, please contact Earl Storrs III, associate, at estorrs@barclaydamon.com; Tony Piazza or Mark Whitford, Insurance Coverage & Regulation Practice Area co-chairs, at apiazza@barclaydamon.com and mwhitford@barclaydamon.com; Matthew Larkin, Torts & Products Liability Defense Practice Area chair, at mlarkin@barclaydamon.com; or another member of the firm’s Insurance Coverage & Regulation or Torts & Products Liability Defense Practice Areas.
1Mandarin Oriental, Inc. v. HDI Global Ins. Co., 2025 US Dist. LEXIS 116611 (SDNY June 18, 2025)