Court Kills R.I. Subpoena of Beacon Mutual Files

March 10, 2006

A Rhode Island Superior Court has blocked a subpoena for computer files sought by state officials as part of their audit of Beacon Mutual Insurance Co.

Beacon Mutual succeeded in convincing the court that the subpoena asking it to turn over the computer hard drives of 22 employees, including the company’s legal counsel and human resources director, if complied with, would be a violation of attorney-client privilege and invasion of employees’ privacy.

Justice Kent wrote that “the production of the subpoenaed material would result in the revelation of privileged and confidential information with respect to corporate matters as well as Beacon’s employees.”

“Such pernicious consequences can not be tolerated in any just and ethical system,” he said of the potential breach of attorney-client privilege.

The judge also found that handing over the human resource files “would display to the world a host of highly personal matters ranging from individuals undergoing psychiatric treatment to those making loan and hardship requests.”

The Rhode Island Department of Business Regulation had issued the subpoena as part of its investigation of the company, which has been accused of giving preferential rates to some customers.

State regulators have been reviewing records at the company’s headquarters in Warwick. But the company refused to let state auditors copy files from 22 computers.

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