Reasonable suspicion of crime enough to overcome attorney-client privilege

3rd Circuit clarifies standard that must be met to invoke the crime-fraud exception

In a precedential ruling in In re: Grand Jury John Doe 1; John Doe 2; ABC Corp., the 3rd Circuit clarified the standard that has to be met to invoke the crime-fraud exception to attorney-client privilege: a reasonable basis to suspect a crime or fraud.

The crime-fraud exception “permits the government to obtain access to otherwise privileged communications and work product when they are used in furtherance of an ongoing or future crime,” according to the decision.

Limited Protection

The 3rd Circuit reminds in-house counsel that attorney-client privilege and the work product doctrine are “not absolute” protections. To overcome attorney-client privilege, the government had to “make a prima facie showing that (1) the client was committing or intending to commit a fraud or crime, and (2) the attorney-client communications were in furtherance of that alleged crime or fraud,” the court wrote.

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