Generative AI and privilege: What recent court decisions mean for your company

Generative artificial intelligence (AI) tools are now embedded in daily business operations—from drafting emails and summarizing documents to analyzing data and preparing internal reports—whether they’re sanctioned or not. But as companies and employees adopt these tools, courts are beginning to address an important question: Are AI prompts, uploads, and outputs safe from discovery?

Two recent federal decisions provide early guidance—and a cautionary lesson.

Emerging legal framework

Courts are applying traditional privilege principles to AI use. The core questions remain the same:

• Attorney-client privilege hinges on attorney-client communication, confidentiality, and no waiver to third parties.

• Work product hinges on anticipation of litigation, prepared by or for counsel, and not waived by disclosure to an adversary.

In a recent criminal case, Bradley Heppner generated documents using the publicly available AI platform Claude after learning he was under investigation. He later shared those AI-generated materials with his attorneys and claimed his “communications” with Claude were privileged.

The court rejected both attorney-client privilege and work product protection on approximately 31 documents. It emphasized the following:

• The AI platform wasn’t an attorney or an agent of an attorney.

• Heppner used the tool without counsel’s direction.