A confidential relationship between an attorney and their client is sacrosanct. All communications, personal and professional, between the attorney and their client are confidential—a cornerstone of common law in our legal system for 500 years.
One exception to the confidentiality of attorney-client communications is the crime-fraud exception. This exception comes into play when a client conveys to their attorney that they are involved in an ongoing crime or a plan to commit a future crime.
“The attorney-client privilege must necessarily protect the confidences of wrongdoers, but the reason for that protection–the centrality of open client and attorney communication to the proper functioning of our adversary system of justice–ceases to operate at a certain point, namely, where the desired advice refers not to prior wrongdoing, but to future wrongdoing. 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.”
There are important limitations to the crime-fraud exception.
First, communications from the client to the attorney about past crimes committed by the client remain under the purview of attorney-client confidentiality; and second, when a client has not fully formed an intent to engage in any of the criminal activity but discusses them as possible options with the attorney.
In other words, thought crimes are not covered by the crime-fraud exception.
Under most state codes of professional conduct, under certain circumstances, an attorney may have an ethical and legal obligation to report criminal activity within the crime-fraud exception, especially when such activity could put someone at risk of harm.
There is another option in the crime-fraud exception arena. That’s when clients inform their attorney that they plan to or have committed perjury against the attorney’s advice. Rather than report the client’s perjury to the court, the attorney can withdraw from the case. The attorney does not have to report the perjury to the court as a basis for withdrawal, although the court may reasonably suspect that is the reason.
In effect, the attorney walks away from the client’s perjury, leaving it as a matter between the client and the future attorney.
The American Bar Association’s Model Rule of Professional Conduct 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 applications of the law.”
Writing in the May 2020 edition of the Dallas Bar Association’s Headnotes (Vol. 45, No. 5), Mario H. Nguyen offered the following 9 tips to attorneys on how to avoid falling into the crime-fraud exception:
- When communicating with clients, ask yourself would I be okay with a recording or written copy of my advice becoming public?
- Proactively inform your clients that you cannot advise them related to ongoing or future crimes or fraud.
- Clearly identify when you are providing legal advice and when you are declining to do so.
- Address and document business advice separately from legal advice, if you advise clients on both.
- Document any facts that serve as a promise for your legal advice, along with their corresponding sources. If your advice relies on any assumptions, identify them. If modifying those assumptions would materially alter your advice, say so.
- Avoid giving legal advice based on facts that you have not independently verified. If, however, you must, note any unverified material facts that are so material that a variance would significantly alter your advice, and specify how changes in those unverified material facts could affect your advice.
- Understand the source and reliability of client documents and data before producing them.
- Ask your client for proof of material facts—even if it is uncomfortable.
- If you cannot get comfortable with the client or his willingness to follow your advice, be ready to terminate representation (even if it means foregoing a lucrative client).
The crime-fraud exception in Texas is governed by Rule 503(d)(1) of the Texas Rules of Evidence. To apply, the attorney’s services must be sought or used to further some criminal activity by the client. The following ground rules apply when the crime-fraud exception enters a criminal proceeding:
- The party taking advantage of the crime-fraud exception in a criminal proceeding must make a prima facie showing that a crime is ongoing or is about to be committed.
- The trial court is the sole arbiter in determining whether a prima facie showing has been made.
- The party must show that the otherwise privileged communication concerns the criminal activity.
- Communications by a client about past criminal activity are privileged and cannot be disclosed by attorney.
- Disclosure by attorney of ongoing or contemplated criminal activity is required to keep the activity from continuing or occurring in the future.
- The crime-fraud exception applies not only to ongoing criminal activity but to the destruction of evidence associated with that activity as well (such as disposing of a murder weapon).
The crime-fraud exception has found its way into the everyday American lexicon in recent months as a bevy of former President Donald Trump’s attorneys have appeared before grand juries and a DOJ assigned special counsel investigating Trump’s charged and alleged criminal activity during and after his presidency.
There is prima facie evidence, as the courts have found, that the former president tried to entangle one or more of his attorneys into criminal activity in an effort to obstruct the criminal investigations against him.
How many, if any, of the former president’s attorneys will ultimately testify against him remains to be seen.
What is fairly certain is that some of those attorneys were drawn into Trump’s charged and alleged criminal activity because of money, power, and fame. They will find it a terrible price to pay.
Lawyers have a unique and vital role in the American judicial system. It is vital that lawyers maintain the confidential nature of attorney-client communications.