26.8 - 4. Crime-Fraud Exception

JurisdictionNew York

4. Crime-Fraud Exception

Another exception to the privilege is the crime-fraud exception. One New York appellate court explained,

The crime-fraud exception encompasses a fraudulent scheme, an alleged breach of fiduciary duty or an accusation of some other wrongful conduct. Advice in furtherance of a fraudulent or unlawful goal cannot be considered sound. Rather advice in furtherance of such goals is socially perverse, and the client’s communications seeking such advice are not worthy of protection. 3720

To invoke the crime-fraud exception, an opponent must make a prima facie showing that: “(1) the client was engaged in or planning a criminal or fraudulent scheme when he sought the advice of counsel to further the scheme, and (2) the documents containing the privileged materials bear a close relationship to the client’s existing or future scheme to commit a crime or fraud.”3721

The U.S. Court of Appeals for the Fourth Circuit stated,

A party invoking the crime-fraud exception can satisfy the first prong of this test by making a prima facie showing of evidence, which, if accepted by the trier of fact, establishes the elements of an ongoing or prospective violation of the law. The second prong of this test is satisfied with a showing of a close relationship between the withheld communications and the alleged violation. Once a sufficient showing has been made, the attorney-client privilege ceases to protect any of the communications related to the alleged violation. 3722

This exception can serve as...

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