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The Us Crime-fraud Exception To The Right Of The Attorney-client Privilege

The attorney-client privilege in the United States

The attorney-client privilege is the oldest privilege acknowledged by the Anglo-American jurisprudence system, with its use since the 16th century being firmly founded in English law. The privilege functions to avoid any evidence by the solicitor against the client based on the principle of honour. In the US, the attorney-client privilege has been described as follows: (1) Where legal advice of any sort is obtained (2) from a competent legal advisor in his or her capacity as such, (3) the communications relating to that intent, (4) made by the client in confidence (5), (6) are made in confidence.

The right guarantees that ‘a person seeking advice or assistance from a lawyer should be absolutely free of any fear of uncovering his secrets.’ The idea underlying the right is that ‘good legal advice [and] advocacy’ should be given by the solicitor. The client can talk freely with counsel, reveal all relevant details and establish a privacy zone with the protection of privilege. Shielded by the right, the client will be more able to communicate things that may otherwise be suppressed to the lawyer. The lawyer will offer more detailed guidance by fostering such candor and integrity, and the client will be comfortable in the knowledge that the lawyer’s statements will not be used against his or her interests.

Under the security of privilege, the lawyer can not be required to reveal, nor can he or she willingly disclose, to him or her, matters communicated in trust by the client for the purpose of seeking legal advice. Likewise, for the reason of seeking legal representation, the client will not be required to testify about correspondence with the lawyer.


The crime-fraud exemption

In general, communications that would otherwise be covered by the right of attorney-client are not protected in the US if they relate to consumer communications in order to facilitate contemplated or ongoing illegal or fraudulent conduct. The reason for the exemption is that the right protects the provision of sound legal advice, but advice may not be deemed ‘sound’ in pursuit of a fraud or unlawful objective. Instead, it is socially perverse and the communications requesting input from the client do not deserve protection. Their communications are no longer sacrosanct, as the client and lawyer become instruments of a crime or fraud.

A party must show that there is probable cause to conclude that a fraud or crime has been committed and that the communications in question were in support of the crime or fraud in order to establish the crime-fraud exemption under U.S. law. Probable cause is the equivalent of ‘a fair basis to assume that the target was fraudulent’ This ‘requires[s] that a responsible person has a fair basis to believe that a crime or fraud has been committed or attempted, and that the communications are in support of it’. For the crime-fraud exemption to apply, the criminal or fraudulent existence of the objective need not be conclusively established; it may be sufficient to show a rational basis for assuming that the objective was criminal or fraudulent. A fair basis for suspecting the perpetration or attempted perpetration of a crime or fraud can be shown by demonstrating that when obtaining guidance from counsel, the client was engaged in planning an incorrect scheme, or committed or tried to commit a crime or fraud after receiving the benefit of the work of counsel.

Communications encouraging crime or fraud are those which relate appropriately to the subject-matter of the crime or fraud, or which have a certain connection between the communication at issue and the prima facie infringement. In other words, in contrast to mere ‘temporal nexus’ there must be ‘purposeful relation’ between the communications at issue and the illegal or fraudulent conduct. Without a finding that the attorney had illegal or fraudulent intent, probable cause for the application of the crime-fraud exemption can be found.


Privileged communications outside the United States

“When privileged communication takes place in a country outside the US, US courts generally defer “to the law of the country with the “predominant” or “most direct and compelling interest” in the confidentiality of such communications, unless international law is contrary to [US] public policy. ‘[Under this test, communications related to operation in a foreign country are controlled by the privilege law of that country, whereas communications that “touch base” with the United States are regulated by the privilege law of the United States.’

One US court observed that ‘the communications in question do not relate to the basis of the United States and therefore the privilege rule of the United States does not extend to these records. Since these communications specifically “relate to activities in a foreign country[they] are governed by the law of privilege of that country,” which is the law of Sweden in this case. Finally, a party invoking a foreign right has the duty of justifying the applicability of foreign law and must prove that it is shielded from disclosure by foreign law. The responsibility then moves to provide facts to the opponent of the privilege to refute the existence of the privilege