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Basics of the Attorney-Client Privilege (Part III)

As discussed in Part I of this series, the attorney-client privilege shields and protects from disclosure confidential communications between an attorney and his/her client. In Part II, we explored various factual matters and information not subject to the privilege. In this Part III will discuss exceptions to the privilege under California law.

California Business Law: Exceptions to the Attorney-Client Privilege

These are the four basic exceptions to the attorney-client privilege under California law:

Crime or Fraud Exception

Criminals cannot use the attorney-client privilege to prevent prosecution. If a client communicates with an attorney in furtherance of a crime or fraud, then the attorney-client privilege does not apply. This is codified at Cal. Evid. Code § 956 which states: “There is no privilege under this article if the services of the lawyer were sought or obtained to enable or aid anyone to commit or plan to commit a crime or a fraud.” See here.

Preventing Future Crime or Harm Exception

Similarly, if the client communicates with an attorney and the attorney reasonably believes that a crime involving death or substantial bodily harm may be prevented by disclosure, the privilege is deemed nullified. This is codified at Cal. Evid. Code § 956.5 which states: “There is no privilege under this article if the lawyer reasonably believes that disclosure of any confidential communication relating to representation of a client is necessary to prevent a criminal act that the lawyer reasonably believes is likely to result in the death of, or substantial bodily harm to, an individual.”

Death of the Client Exception

The attorney-client privilege does not always survive the death of the client. Under some circumstances involving wills, real estate deeds and similar legal matters, the privilege may be breached. See Cal. Evid. Code §§ 957, 959-561.

Common Interest Exception

Sometimes two people will seek legal counsel and advice from the same attorney — think joint venturers or partners who want advice on some particular legal matter. This is not at all uncommon. However, if the relationship between the two individual clients sours and conflicts arise, then, for purposes of the dispute between them, the two clients cannot assert the attorney-client privilege against the other. Otherwise, the attorney is still bound by the attorney-client privilege. This is codified at Cal. Evid. Code § 962 which states: “Where two or more clients have retained or consulted a lawyer upon a matter of common interest, none of them, nor the successor in interest of any of them, may claim a privilege under this article as to a communication made in the course of that relationship when such communication is offered in a civil proceeding between one of such clients (or his successor in interest) and another of such clients (or his successor in interest).”

Note that the common interest exception does not apply to corporate entities. As discussed in the fourth and final part of this series, for corporate entities, the privilege is held by the corporations, not the individuals owning and working for the corporation.

California Business Law: No Fiduciary Duty Exception in California

In many states, there is a fifth exception to the attorney-client privilege involving corporations when the corporation’s shareholders seek to pierce the corporate veil. In most jurisdictions, an attorney for the corporation can be compelled to disclose the confidential communications as part of the litigation. However, California courts have refused to carve out a shareholder exception to the attorney-client privilege, even in a shareholder derivative action. See National Football League Properties, Inc. v. Superior Court, 75 Cal.Rptr.2d 893 (Cal. App. 1998).

California Business Law: Contact San Diego Corporate Law Today

If you would like more information, contact attorney Michael Leonard, Esq., of San Diego Corporate Law. Mr. Leonard has extensive experience in drafting contracts and agreements necessary for running your business Mr. Leonard understands his ethical and legal obligations to be a trusted advisor, keeping all matters confidential and privileged. Mr. Leonard can be reached at (858) 483-9200 or by using the form on this page on the Firm’s website.