Attorney-client privilege is one of the most basic and most important aspects of the attorney-client relationship. Without this foundation stone of the attorney-client relationship, the whole process would break down. If a client cannot trust an attorney, then a client cannot fully utilize an attorney’s skills and knowledge. In an ideal world, one could simply have faith that one’s attorney will not repeat to anyone the contents of their communications with an attorney. However, in the real world, it is better to have the force of law behind such a concept. And, indeed, that law that is known as attorney-client privilege is something that is both robust and often called upon in day to day legal matters. But, even though the attorney-client privilege is common knowledge and often utilized, it is not an absolute. There are nuances and exceptions to this most basic of privileges.
For example, an important caveat to attorney-client privilege is the crime-fraud exception. This was laid out by the Supreme Court in 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.” Clark v. United States, 289 U.S. 1, 15 (1933).
This important exception is, as the name implies, triggered when the normally privileged communications between an attorney and a client involve a crime. “To invoke the crime-fraud exception successfully, the government has the burden of making a prima facie showing that the communications were in furtherance of an intended or present illegality and that there is some relationship between the communications and the illegality.” Chen, 99 F.3d at 1503 (quotation omitted). “The test for invoking the crime-fraud exception to the attorney-client privilege is whether there is ‘reasonable cause to believe that the attorney's services were utilized in furtherance of the ongoing unlawful scheme.’” Id. (quoting In re Grand Jury Proceedings, 87 F.3d at 381). United States v. Bauer 132 F.3d 504 (9th Cir. 1997).
The above statement provides important clarifications to the crime-fraud exception. Firstly, it illuminates the fact that there must be a relationship between the normally privileged communications and the illegal act. The privileged communications that are sought must be relevant ones. Secondly, it clarifies the temporal aspect of the exception. Past crimes are not subject to the crime-fraud exception. It must be an “ongoing unlawful scheme”. The client must be in the process of carrying out the said crime or fraud. The crime-fraud exception therefore applies to present and future crimes. To explain further:
“Two conditions must be met. First, the client must have made or received the otherwise privileged communication with the intent to further an unlawful or fraudulent act. In re Sealed Case, 754 F.2d 395, 399 (D.C. Cir. 1985) (Sealed Case II); United States v. White, 887 F.2d 267, 271 (D.C. Cir. 1989). Second, the client must have carried out the crime or fraud. In other words, the exception does not apply even though, at one time, the client had bad intentions. Otherwise "it would penalize a client for doing what the privilege is designed to encourage--consulting a lawyer for the purpose of achieving law compliance." See RESTATEMENT OF THE LAW GOVERNING LAWYERS § 142 cmt. c, at 461 (Proposed Final Draft No. 1, 1996).” In re Sealed Case, 107 F.3d 46, 49. So, steps must have been taken on the present or future crime in order for the crime-fraud exception to come into play. Simple advice in order to achieve “law compliance” is not enough to trigger the exception.
A few smaller points are also important to take note of in relation to the crime-fraud exception. The exception applies: “[E]ven where the attorney is unaware that his advice may further an illegal purpose.” Laurins, 857 F.2d at 540. Moreover, the attorney-client privilege can be broken even if the attorney is unwittingly providing legal advice in furtherance of a crime.
Secondly, work product can also be drawn in by the crime-fraud exception:
"With respect to work product immunity, the crime-fraud exception calls for a somewhat different inquiry than with the attorney-client privilege. The focus is not on the client's intent regarding a particular communication, but on the client's intent in consulting the lawyer or in using the materials the lawyer prepared. The question is: Did the client consult the lawyer or use the material for the purpose of committing a crime or fraud?" In re Sealed Case, 107 F.3d 46, 51 (1997)
Lastly, one should be aware of issues regarding third-parties:
“The privilege is the client's, and it is the client's fraudulent or criminal intent that matters. A third party's bad intent cannot remove the protection of the privilege. For example, a stenographer hired to record a meeting between an attorney and a client might intend to use his notes to commit some kind of crime--say extortion--but the contents of the meeting would not therefore cease to be privileged. Otherwise, existence of the attorney-client privilege would be unpredictable and the interest of "full and frank communication" between client and counsel would be undermined.” See Upjohn Co., 449 U.S. at 389, 101 S. Ct. at 682. In re Sealed Case, 107 F.3d 46, 49.
Attorney-client privilege, while important (some may even say essential) to legal work, is not an absolute shield one can hide behind. It can be pierced and both client and attorney should be aware of its limitations.