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No, it's not a prohibition and does not prevent someone from reusing it. Rather, it's more of a "CYA" for the sender. If, for whatever reason, there is litigation or some subpoena for documents, this statement could be the basis for the sender to claim that it's privileged and should not be disseminated to the other party (in the litigation). Otherwise, it could be produced through the "discovery process" (the process in pending litigation where each party gets to request and receive documents from the other side pertaining to issues in the case).
But it does not prevent a recipient of the email from forwarding it on.
Once the sender sends the communication to the recipient, the sender generally has no additional control over that communication. But again, the main concern is to keep it privileged if it is in fact privileged, in a litigation or other legal tribunal / case/ etc... .
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The confidential minutes of a Property Owners Association received by a member is being redistributed to non-members. Can I stop that by inserting the statement I previously submitted to you?
You can try, but that statement does not legally prevent redistribution. Rather, there would have to be a preexisting agreement between the association and member (contract, bylaw, CC&R, etc...) to legally prevent them from doing this, and to be able to sue said agreement.
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