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    October 01, 2023 Ethics

    How the crime-fraud exception can threaten attorney-client privilege

    By David L. Hudson

    A sacrosanct concept in law is the attorney-client privilege—that a client can speak to his or her attorney knowing full well that what the client says will be kept secret. The evidentiary privilege ensures free and frank communications between attorney and client, a reality that generally serves the public interest.

    John Henry Wigmore, the first full-time dean of Northwestern University School of Law and author of the leading treatise Wigmore on Evidence, famously wrote that this was “the oldest of the privileges for confidential communications.” Similarly, ethics expert Geoffrey C. Hazard Jr. wrote in a 1978 law review article that the attorney-client privilege is “indispensable to the lawyer’s function as advocate.”

    However, there are limits.

    One of the key limits is the so-called crime-fraud exception—that the attorney-client privilege can be pierced if the client intentionally seeks the attorney’s advice to further the commission of criminal or fraudulent activity. U.S. Supreme Court Justice Benjamin Cardozo famously explained in United States v. Clark (1933): “There is a privilege protecting communications between attorney and client. The privilege takes flight if the relation is abused. A client who consults an attorney for advice that will serve him in the commission of a fraud will have no help from the law. He must let the truth be told.” Decades later, the Supreme Court said in U.S. v. Zolin (1989), “It is the purpose of the crime-fraud exception to the attorney-client privilege to assure that the ‘seal of secrecy’ between lawyer and client does not extend to communications ‘made for the purpose of getting advice for the commission of a fraud’ or crime.”

    The crime-fraud exception has hit front headlines recently, most notably with cases involving former President Donald Trump and some of his lawyers, past or present. One of those from front-page headlines is the case involving the former president’s alleged misuse of classified documents that were located in his Florida Mar-a-Lago estate. In that case, according to ethics expert Peter Joy of the Washington University School of Law in St Louis, “The special counsel presented enough evidence that Trump committed the crime through his attorneys or with his attorneys’ assistance, and that led the judge to find that his communications with his lawyer lost attorney-client privilege due to the crime-fraud exception.”

    But Trump is not the only high-profile defendant in cases involving the crime-fraud exception. “Over the last few years, there has been an increasing suspicion that lawyers are assisting high-profile clients with lawbreaking,” says Thomas Lininger, a professor at the University of Oregon School of Law who has written on the crime-fraud exception. “The Trump investigations are an important part of the story, but they’re not the whole story. There were other high-profile cases in which attorneys or commentators discussed the potential value of the crime-fraud exception. Examples include the investigations of Paul Manafort, Jeffrey Epstein and Harvey Weinstein,” he adds.

    Cause for concern?

    The exception applies when a) the client intends to commit crime or fraud, and b) the client sought the attorney’s help to commit the crime or fraud. Both of these steps are important.

    “The key question is whether the client seeks the attorney’s help in furthering a crime or fraud,” Lininger says. “That usually means a future or ongoing crime or fraud, but it could potentially mean a past crime or fraud if the client seeks the attorney’s aid in hindering detection by law enforcement, such as concealing ill-gotten gains.”

    While an attorney may attempt to invoke the attorney-client privilege or invoke the duty of confidentiality, “A judge’s ruling that there is a crime-fraud exception can compel the lawyer to disclose the communication,” Joy says.

    And that is where the exception has real-world consequences: Lawyers can be forced to disclose the nature of their conversations with their clients under penalty of contempt of court.

    “The idea that a lawyer can be compelled to testify about her representation of a client or to reveal confidential communications with a client is anathema to lawyers and clients alike,” Douglas R. Richmond wrote in his 2018 South Carolina Law Review article, “Understanding the Crime-Fraud Exception to the Attorney-Client Privilege and Work Product Immunity.”

    Noted Minnesota-based criminal defense attorney Andrew S. Birrell, a vice president of the National Association of Criminal Defense Lawyers, warns that the crime-fraud exception does pose a threat to client-lawyer confidentiality. “Any intrusion into that privileged relationship constitutes a threat to the proper functioning of our justice system,” he says. “Therefore, any mechanism invading that privileged relationship should be viewed with great caution—whatever standard is applied to pierce it.”

    But Lininger does not feel that a proper application of the crime-fraud exception threatens the attorney-client privilege. “I don’t have that concern, assuming that courts continue to insist on these two requirements: The client must have intended to commit a crime or fraud; and the client must have sought the attorney’s help to commit the crime or fraud,” he says. Lininger believes there is really no reason to protect such communications. “The requirements for the exception are strict enough that well-meaning clients will not accidentally trigger the exception,” he says.

    He also notes that attorneys can advise clients on whether certain courses of action are illegal, citing ABA Model Rule of Professional Conduct 1.2(d). That rule provides: “A lawyer shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent, but a lawyer may discuss the legal consequences of any proposed course of conduct with a client and may counsel or assist a client to make a good faith effort to determine the validity, scope, meaning or application of the law.” Comment 9 to Rule 1.2 further provides, “There is a critical distinction between presenting an analysis of legal aspects of questionable conduct and recommending the means by which a crime or fraud might be committed with impunity.”

    However, after the attorney clarifies that a certain course of conduct is illegal, the client should not persist in seeking the attorney’s help to commit such crime or fraud. It is this type of client conduct, Lininger says, that triggers the crime-fraud exception.

    The question then becomes: What level of evidence is required to invoke the crime-fraud exception? Most courts apply what is known as a prima facie standard of proof. Some jurisdictions consider this analogous to a finding of probable cause.

    In his 2020 Minnesota Law Review article, “No Privilege to Pollute: Expanding the Crime-Fraud Exception to Attorney-Client Privilege,” Lininger wrote: “The low standard of proof required for the crime-fraud exception has drawn criticism from staunch defenders of the attorney-client privilege. But advocates of the crime-fraud exception respond to this criticism by pointing out that low standards of proof are the norm for evidentiary rulings. Moreover, the party defending the privilege usually ‘holds the cards’ that could prove crime or fraud, so a standard of proof more favorable to the opponent of the privilege seems reasonable given the asymmetry in the parties’ access to information.”

    The reality is that the crime-fraud exception remains an indelible reality for those clients who seek to use legal services to circumvent the law.

    David L. Hudson Jr.

    Belmont University College of Law

    David L. Hudson Jr. teaches at Belmont University College of Law. He is the author, co-author or co-editor of more than 40 books. For much of his career, he has focused on the First Amendment and professional responsibility.