Fiction, Reality, Fraud and Privilege

December 3, 2022

By Brian Babcock

Have you watched Better Call Saul or Breaking Bad? Do you recall Saul Goodman saying what Walt needed was “not a criminal lawyer but a criminal lawyer”?

THE ISSUE

What, you may ask, does that have to do with solicitor-client privilege?

We have written before about the importance of solicitor-client privilege in our legal system. It has constitutional characteristics. The proper functioning of our legal system requires that clients be able to confide in their lawyers with confidence that their privacy will be protected.

As important as solicitor-client privilege is to the operation of the system, it will not be extended to situations where it results in an abuse of the system. Saul Goodman may be an entertaining rogue, but he is fictional. In the real world of law, a lawyer who participates with his clients in criminal activity cannot manipulate the system by allowing them to claim privilege when he is part of the fraud.

THE CASE

As with most aspects of our legal system, rights are about balance. We have already written about the Superior Court decision in Wintercorn v. Global Learning Group Inc. where, in a hard-fought civil fraud dispute, a motions judge lays out a lengthy primer on the governing principles of privilege – seventeen of them by his count.

In Wintercorn, the judge finds that although the case is about fraud, the “fraud exception” does not apply.

Why not?

Because :

First, the fraud exception applies only in situations where a client has engaged in fraud (either with counsel or by deceiving counsel) through impugned communications which were “criminal in themselves or intended to further criminal purposes”. It does not apply to fraud by the client on the lawyer to engage in a civil wrongful act, such as the civil fraud and other wrongful conduct alleged in the present case.

Second, even if the fraud exception applied in the civil context, the plaintiffs have not led sufficient evidence to establish a prima facie case that GLGI had the requisite intent to defraud counsel in order to commit an unlawful act.

[citations omitted]

It is the criminal aspect of the attempted fraud that is important in understanding the limits of this exception. Together with this is the requirement that the communication intended to invite the lawyer to be a participant in the crime. The  courts, along with the legal profession, do not encourage lawyers to behave like Saul Goodman. Now that Better Call Saul is concluded, you may know -spoiler alert- that Saul paid a very high price for his criminality. In this respect, fiction resembles reality. We may admire Saul for taking that hit to protect his ex-wife from prosecution, but that is not the ultimate moral lesson we should take away from that outcome. Most lawyers and law firms are ethical and expect our clients to act in good faith when they come to us for advice.

The good news is that in the real world of law, solicitor-client privilege continues to protect good-faith consultations with lawyers where a client is not sure of the implications of a transaction or activity – because they need the ability to tell their lawyer the true story to get reliable advice.

As long as the client meets the good faith requirement, unless a higher court eventually overrules Wintercorn, the privilege is protected. As the judge in Wintercorn states, even if the fraud exception applied to unlawful civil conduct, the plaintiffs must show evidence that the defendants intended to deceive their lawyer to engage in the alleged civil fraud (see this article for a more thorough explanation of civil fraud). The key is the state of mind of the client, not the lawyer. Privilege will be lost in a civil fraud allegation only where:

  • The challenged communications related to proposed future conduct;
  • The client sought to advance conduct that it knew or should have known is unlawful; and
  • The wrongful conduct under contemplation was clearly wrong.

TAKEAWAYS

  • If you are the victim of fraud, this may appear to be a high hurdle and you may have to find other evidence of fraud. This is one reason why civil fraud is very hard to prove.
  • It does protect the very important principle of solicitor-client privilege and allows clients to obtain advice even when they are wrong doers.
  • Clients should also be aware, however, that if they have crossed the line from good faith into bad faith, lawyers may be compelled to give evidence in any proceeding were civil fraud is alleged against them, as well as criminal fraud.

WHAT CAN WEILERS LLP DO TO HELP YOU?

If you are looking for a lawyer who will be your real-life Saul Goodman, Weilers LLP is not the law firm for you.

Because we do not practice criminal law at Weilers LLP, we are not often faced by the rare situations where a client attempts to draw us into a criminal fraud. If we became aware of that, we would decline to assist the client in their criminality and suggest that the client find legal representation elsewhere.

If you are accused of fraud based upon events which have already occurred, and in good faith want sound advice and vigorous representation with the protection of solicitor-client privilege, Weilers LLP may very well be the right law firm for you.

If you believe that you are a victim of a civil fraud, we may also be the right lawyers to prove it, even when some evidence is protected by privilege.