Circuit Court Analyzes the Crime Fraud Exception

November 2, 2005

All courts recognize that the attorney-client privilege does not protect certain communications relating to a client’s future crime – but they disagree about several aspects of this doctrine.

In In re Grand Jury Proceedings, 417 F.3d 18 (1st Cir. 2005), the First Circuit noted that many decisions focus on the level of proof necessary to justify a court’s in camera review of the communications at issue, rather than on the standard required to actually strip away the privilege. The former analysis generally requires a “prima facie” finding that the otherwise privileged communications involved a future crime, while the latter requires that “there is a reasonable basis to believe that the lawyer’s services were used by the client to foster a crime or fraud.” Id. at 23. The First Circuit noted slightly differing standards used by six other circuit courts (which is somewhat surprising, because supposedly uniform federal common law applies to this issue). The First Circuit also recognized that “it is not enough to find reasonable cause to believe that the client is guilty of crime or fraud” – a court must find “the client’s use or aim to use the lawyer to foster the crime or the fraud.” Id.

As the federal government increasingly uses the criminal laws against corporations, lawyers representing those corporations must become familiar with the crime fraud exception.