In an earlier post on the scope of Attorney-Client privilege, I briefly mentioned the existence of an exception to the powerful Attorney-Client privileged.  That exception is the Crime-Fraud exception which, if properly invoked, has the ability to totally destroy the Attorney-Client privilege.  Because the exception seems relevant to the current news cycle, I thought I would write a quick note on the exception.

See also, Miley Cyrus.

Something most folks don’t internalize is: the privilege to keep communications between lawyer and client secret is owned by the client.  So, if the client waives the privilege, it’s gone.  The attorney does not have his/her own right to claim attorney client privilege.  In most jurisdictions, the law presumes that the client wants to invoke the privilege, thus attorneys can assert the privilege even when the client isn’t around.

I mention this because the goal of the breaching the Attorney-Client privilege is really an attempt to get the attorney to testify or provide documents, not an attempt to get the client to provide evidence.

Among the ways to breach the attorney client privilege is the Crime-Fraud exception to the privilege.  In order for the Crime-Fraud exception to be applicable, a person trying to breach the privilege must make an initial showing that:

  • The client was engaged in, or planning criminal or fraudulent conduct when it sought legal advice from any attorney, and
  • That attorney’s assistance was obtained in furtherance of the criminal or fraudulent conduct.

If the attorney is engaged in actively assisting the client in criminal or fraudulent conduct the second prong will be satisfied (as well as give rise to potential legal jeopardy for the lawyer); however, the attorney need only be the unwitting tool of the client in order for the second prong to be effective.

While the evidentiary bar for an initial showing (a prima facie showing) is relatively low, Courts do provide safeguards to protect the attorney client privilege.  In civil cases, there will be a hearing on the matter in open court and the client will be able to respond.  In criminal cases, this comes up in the context of a grand jury proceeding, and the attorney will not be able to alert the client to the challenge to the privilege.

Once the Crime-Fraud exception is found to be applicable, the Attorney-Client privilege no longer protects any of the documents, other evidence from being obtained and used in Court and further the attorney may now be compelled to testify on those topics against his (now former) client.

Most folks, I think, view this through the lens of a criminal case issue, but the exception does apply to actual fraud cases – which are a civil matter.  Types of fraud where the exception has been properly invoked involved things like fraudulent transfers and defrauding a Bank.

Just something to think about.