The Crime-Fraud Exception to the Attorney-Client Privilege and the Work Product Protection

Read the full article at https://www.linkedin.com/pulse/video-explaining-use-crime-fraud-exception-bad-faith-barry and see the full video at https://youtu.be/PJ6Ue297NeE and at https://zalma.com/blog plus more than 3500 posts. 

The Crime-Fraud Exception

A waiver of the privilege also may result when the carrier is sued for bad faith and/or fraud. For example, California Evidence Code Section 956 provides: “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.” Even without a statute, the license to practice law, is not a license to commit a crime.

One federal court ruled that a bad faith claim not involving fraud is insufficient to trigger the exception. In Freedom Trust v. Chubb Group of Insurance Cos., 38 F.Supp.2d 1170 (C.D. Cal. 1999) the insured argued that the privilege had been waived because the insurer denied coverage in bad faith. The court recognized that the attorney “does not have to be aware of the fraud for the crime-fraud exception to apply” and that the fraud exception includes civil fraud.