Should a lawyer protect her client's confidences when she knows that client is about to perpetrate a fraud that will cause substantial financial harm to third parties? For decades, the response of the organized bar has been a resounding "yes." 1 Until August 2003, the American Bar Association's (ABA's) Model Rules of Professional Conduct (Model Rules) provided that a lawyer owes her client a duty of loyalty to preserve the client's confidences, even if that client is about to commit a criminal fraud.2 The recent wave of corporate scandals that led to record-breaking bankruptcies and investor losses prompted the ABA to reconsider the issue. In August 2003, the House of Delegates adopted revisions to the Model Rules that permit (but do not require) disclosure of client confidences to prevent or mitigate the effects of a client crime or fraud on third parties in furtherance of which the lawyer's services were used.'
Laurie A. Morin,
Broken Trust And Divided Loyalties: The Paradox Of Confidentiality In Corporate Representation,
U.D.C. L. Rev.
Available at: https://digitalcommons.law.udc.edu/udclr/vol8/iss1/14