Definition of 'Privileged Communication'
Interaction between two parties in which the law recognizes a private, protected relationship. Whatever is communicated between these pairs of parties shall remain confidential, and the law cannot force disclosure of these communications. The individual that initially makes the privileged communication legally has the ability to prevent the other party in the relationship from disclosing the content of the privileged communication.
Investopedia explains 'Privileged Communication'
Typically, privileged communications refer to communications between attorney and client, accountant and client, doctor or therapist and patient, priest and parishioner or husband and wife (and, in some states, reporters and their sources). The recipient of the information must keep the communication private, unless the privilege is waived by the discloser of the information.
There are conditions that must be met in order to preserve the confidential status of these communications. First, the communication must be between people in a legally recognized protected relationship. Next, the communication must take place in a private setting, where the communicators have a reasonable expectation of confidentiality (like a private office). Lastly, the privileged status of the communication is lost if or when the communication is shared with a third party that is not part of the protected relationship (however, agents of the recipient of the information - such as an accountant's secretary or a doctor's nurse - would generally not be considered a third party that defeats the privileged status of the communication).