Work-Product Protection in Full Force

The U.S. Court of Appeals for the Third Circuit held that evidence of a client thinking about using a lawyer’s advice to cover up a money-laundering scheme was not enough to defeat work- product protection.

As a result, a grand jury should have never seen a privileged email that the appellant received from his lawyer, but later forwarded to his accountant.

The appellate panel agreed with the district court that the appellant waived his attorney-client protection by forwarding the email to his accountant. However, the three-judge panel disagreed that the crime-fraud exception to the work-product privilege applied in this case.

Every state’s jurisprudence has some version of the crime-fraud exception, which allows the disclosure of certain communications that would otherwise be confidential. This exception to the work-product privilege is meant to prevent abuses of the privilege.

A party must satisfy two requirements when invoking the crime-fraud exception:

  • That the lawyer or client was committing or intending to commit an act of fraud
  • That the attorney work product was used in furtherance of that alleged crime or fraud

In this case, the “evidence is strong, but it is not sufficient by itself to pierce work-product protection.” The appellate panel reasoned that the second requirement can only be satisfied by a showing that the defendant actually engaged in an overt act to further the crime.

Merely thinking about a bad act is not enough to strip work-product protection, no matter how much evidence there is that the lawyer or client was intending to commit an act of fraud.

However, when a client uses work product to further a fraud, “the [client-lawyer] relationship has broken down, and the lawyer’s services have been misused.”

To read the full opinion, click here.

No Love for Lawyer Who Reported Ethics Violation for Personal Benefit

An attorney who agreed to a fee-sharing agreement with his former firm tried to void the arrangement by claiming that there was a conflict of interest between his former firm and defendant, the Board of Education of the City of Buffalo. The alleged conflict revolved around a member of the firm who also sat on the Board of Education.

The Supreme Court of the State of New York, Appellate Division, Fourth Department heard the case and refused to void the contract.

The Court reasoned that the attorney could not make the argument that the agreement should be voided on ethical grounds when the attorney “…freely agreed to be bound by and received the benefit of the same agreement . . . ” and given “there is no indication that the client was in any way deceived or misled.”

The court’s reasoning signals a repudiation of an attempt by a lawyer to use the Rules of Professional Conduct for his own pecuniary benefit. This case also reflects a judicial hesitantancy to issue a ruling that encourages members of the legal profession to interact in an underhanded manner with each other.

To read the full opinion, click here.


The Client Comes First: Lawyers Must Report Co-Counsel’s Potential Malpractice

The sanctity of the attorney-client relationship relies in large part on establishing and preserving a bedrock of trust between the parties. A recently released opinion by The New York State Bar reinforces this principle by concluding that a lawyer to must disclose to his client any potential malpractice of a co-counsel

This obligation arises when a lawyer “reasonably believes” that a co-counsel has committed a “significant error or omission.” The example used in the opinion is that of a lawyer who has learned that his co-counsel did not conduct discovery even though certain documents may have been critical to effective representation in the case.

The opinion recognizes that while a lawyer may desire to maintain a good relationship with co-counsel, the right of the client to be fully informed pursuant to New York Rule of Professional Conduct 1.4 (Communication) is paramount. However, the opinion notes that there is a potential that some lawyers could abuse this new duty to unfairly criticize co-counsel. The opinion addresses this fear and states that a lawyer cannot “wrongfully or improperly disparage the other lawyer in an endeavor to supplant him.”

To read the full opinion, click here.