Concept
Shared Fraud Elements
Disclosure to prevent death, bodily harm, or client crime or fraud
Shared Fraud Elements
Paragraphs (b)(2) and (b)(3) of Rule 1.6 are assembled from the same three parts. Paragraph (b)(2) permits a lawyer to reveal information relating to the representation, to the extent the lawyer reasonably believes necessary, to prevent the client from committing a crime or fraud that is reasonably certain to result in substantial injury to the financial interests or property of another and in furtherance of which the client has used or is using the lawyer's services.1 Paragraph (b)(3) keeps that vocabulary but widens the response. It lets the lawyer prevent, mitigate, or rectify substantial injury to another's financial interests or property that is reasonably certain to result or has resulted from the client's commission of a crime or fraud in furtherance of which the client has used the lawyer's services.2
Set side by side, the two texts require three things at once: a crime or fraud by the client, substantial financial injury to someone else, and the client's use of the lawyer's services to further the wrong. Each element does separate work. The crime-or-fraud element identifies the kind of wrongdoing; a lawful but costly business decision, or a loss that simply falls on a counterparty, supplies no trigger however much money is at stake. The injury element supplies the stakes, and the word substantial leaves small losses under the default of confidentiality in Rule 1.6(a). The services element ties the lawyer to the wrong, which keeps the exceptions from becoming a license to report any client's fraud. When any one element is missing, the default controls and the information stays confidential.
Because the elements are shared, the two paragraphs differ chiefly in timing. Paragraph (b)(2) looks forward. It reaches a client who is committing or about to commit the wrong, early enough for disclosure to prevent the injury. Paragraph (b)(3) adds mitigation and rectification, so it also reaches injury that is reasonably certain to follow or has already occurred. Later sections develop that contrast. The task here is to learn each element on its own terms, in the order the paragraphs state them.
Crime or Fraud Defined
Rule 1.6(b)(2) permits disclosure to prevent the client from committing “a crime or fraud,” so the first fact a lawyer must find is wrongdoing of one of those two kinds.3 The word or matters: conduct qualifies if it is a crime, a fraud, or both, and a deception that no prosecutor would charge still counts when it is fraud. The paragraph defines neither noun. Crime takes its meaning from the criminal law, so the work lies in the word fraud.
The New Jersey Supreme Court did that work in A. v. B. Hill Wallack, a law firm that did estate planning for a husband and wife, also represented a woman in a paternity action against the husband. The overlap surfaced when the firm requested disclosure of the husband's assets and was told that it already had the information.4 The firm withdrew from the paternity matter and wrote to the husband that it believed it had an ethical obligation to tell his wife that he had an illegitimate child, without identifying the child, and that it would do so itself if he did not.5 The court first held that the facts did not justify mandatory disclosure under RPC 1.6(b), because the child's possible inheritance from the wife's estate was too remote to be “substantial injury to the financial interest or property of another.”6
The fraud question arose under a different paragraph, RPC 1.6(c). That paragraph permitted, but did not require, a lawyer to reveal confidential information to the extent the lawyer reasonably believed necessary “to rectify the consequences of a client's criminal, illegal or fraudulent act in furtherance of which the lawyer's services had been used.”7 The rule did not define a “fraudulent act,” so the court gave the term its meaning from its own construction of “fraud” in the crime-or-fraud exception to the attorney-client privilege, and it likewise construed the term broadly.8
The borrowing makes sense because both provisions concern a client who turns the lawyer's services toward wrongdoing. Under the privilege, a client who uses legal services to advance or conceal criminal or fraudulent conduct, with or without the lawyer's knowledge, forfeits protection, because the illegitimate objective prevents an authentic attorney-client relationship from forming. The client must pervert the relationship toward the proscribed end for the privilege to be lost.9
Applying that broad reading, the court held that the husband's deliberate omission of his illegitimate child was a fraud on his wife.10 The reasoning had two steps. When the spouses discussed their estates with the firm, each could reasonably expect the other to disclose information material to how the estates would pass, including children who were contingent residuary beneficiaries, and the husband breached that duty. The omission mattered because, under the reciprocal wills, the child's existence could affect distribution of the wife's estate if she predeceased him.11 In the court's words, the husband had in effect used the firm's services to defraud his wife in the preparation of her estate.12 No affirmative false statement drove the analysis. Deliberate silence about a material fact that the other spouse could reasonably expect to be disclosed was enough.
Two limits keep the case in proportion. First, it construed New Jersey's rule, which the court itself said exceeds the Model Rules in authorizing disclosure, and the provision it applied reached an “illegal” act as well as a criminal or fraudulent one and served to rectify consequences.13 It therefore persuades on how courts read the word fraud, and it does not interpret the Model Rule's text. Second, the firm learned of the child through its representation of the mother, so the husband's expectation of nondisclosure may have been weaker than if he had confided in the firm, and that makes the facts unusual.14 The same case shows why fraud alone does not suffice. The court found the possible injury too remote to require disclosure under RPC 1.6(b), even as it treated the omission as fraud for purposes of RPC 1.6(c).15 The next two subsections take up the injury and services elements that must be shown as well.
The opposite pole matters as much. The privilege reasoning the court borrowed separates a client who deliberately misuses legal services to advance a crime or fraud from a client who asks about a proposed course of action that the lawyer then finds unlawful. The privilege covers the second client, because it exists to encourage people to seek a lawyer's help in conforming their behavior to the law, and when the law is unclear the client is entitled to the lawyer's candid information.16 A client who asks whether a plan is lawful has therefore committed no crime or fraud by asking.
The first client's conversation is the ordinary use of a lawyer, and the second client's plan is the deliberate deception that a broad reading of fraud is meant to capture. A broad reading does not turn every doubtful plan into wrongdoing. It reaches deception, and the services element, discussed below, then asks whether the lawyer's work was the vehicle.
Substantial Financial Injury
The injury element appears in the text of both paragraphs, and it decides how much must be at stake before a lawyer may speak. Paragraph (b)(2) permits disclosure to prevent a crime or fraud “that is reasonably certain to result in substantial injury to the financial interests or property of another,” so the threatened loss must be both probable and serious.18 Paragraph (b)(3) keeps the phrase and changes only the timing, covering injury that is reasonably certain to result or has already resulted from the client's crime or fraud.19 The victim is another, meaning someone other than the client, which fits the purpose of both paragraphs: protecting third parties from the client's wrongdoing. The previous subsection fixed what the client must have done. This one fixes what that conduct must threaten or have caused.
Two modifiers do separate work in the phrase. Substantial measures seriousness, and because the text supplies no dollar figure, the question is whether the loss is serious rather than trivial. Reasonably certain measures probability: the loss must be likely, not merely conceivable, as the earlier discussion of the same phrase in the bodily-harm exception explained. A threatened loss must clear both, and passing one does not rescue a failure on the other. A catastrophic loss that is only a remote possibility fails on probability, and a certain but trifling loss fails on size. Paragraph (b)(3) changes the picture in one respect. Its words has resulted cover injury that has already happened, and an existing injury needs no forecast, so the probability question falls away for completed losses while the seriousness question remains.
The two thresholds reflect what a disclosure costs. A lawyer cannot take back a revealed confidence, so the exceptions open only where the harm to the victim is serious and likely. If a conceivable loss sufficed, nearly every matter would qualify, because nearly every matter involves some third party who might lose something.
The failing side shows the probability threshold most clearly. In A. v. B., the firm argued that RPC 1.6(b) required it to tell the wife about the husband's illegitimate child. The court held that the facts did not justify mandatory disclosure, because the possible inheritance of the wife's estate by the child was too remote to constitute “substantial injury to the financial interest or property of another.”20 The loss depended on events that had not occurred and might never occur, including the wife's dying before the husband under their reciprocal wills.21 A loss that arrives only if a chain of future contingencies falls into place is the kind the Model Rule's phrase reasonably certain screens out.
Two cautions keep the case in proportion. It construed New Jersey's mandatory paragraph, so it illustrates how a court reads substantial and does not interpret the Model Rule. And the holding did not end the matter, because the court turned next to the permissive paragraph, RPC 1.6(c), which addresses rectifying the consequences of a fraud in which the lawyer's services were used.22 A later section takes up that route under rectification.
The bank's loss follows from the ordinary course of events once the loans are made, with no chain of uncertain future events between the fraud and the harm, and the sums are large, so the injury element is met under either paragraph. The invoice fails from the opposite direction: the customer's loss is certain, but a few dollars is not substantial injury. The A. v. B. facts fail on probability. Between them, the three situations mark both edges of the phrase. Even the bank scene satisfies only the injury element, because the falsification must still be a fraud, which a deliberately falsified list is, and the lawyer's services must still have been used, the subject of the next subsection.
A stem that stresses a large sum invites the student to skip step three, and a stem that stresses only that the victim might lose something invites the opposite error of ignoring size. Both must be satisfied, and the crime-or-fraud and services elements must be shown as well.
Use of the Lawyer's Services
The third element is a condition about how the client carried out the wrongdoing. Under Rule 1.6(b)(2), the crime or fraud must be one “in furtherance of which the client has used or is using the lawyer's services,” and paragraph (b)(3) repeats the condition in the past tense by requiring that the client “has used the lawyer's services.”24 The two preceding subsections fixed what the client must have done and what harm must follow. This one asks what connects the lawyer to the wrong, because a client's fraud, however costly to its victims, falls outside both exceptions when the lawyer's work played no part in it.
The condition separates two situations in which the lawyer stands in very different positions. When the lawyer's own work carries the deception, as when an opinion letter, a drafted contract, or a served discovery response reaches the person being misled, the lawyer's product is doing the harm, and continued silence leaves it working on the victim. When the client commits the same fraud entirely alone, the lawyer is a bystander, and the usual reasons for confidentiality keep their full force. The services element therefore does two jobs at once. It marks the point at which the lawyer's own work is implicated, and it fences the exceptions so they cannot grow into a general power to inform on clients.
A large fraud tempts students to treat the exceptions as satisfied the moment a crime and a heavy loss appear in the facts. The services gate shows why that shortcut fails.
The lease lawyer did represent the client, which shows that a general attorney-client relationship does not satisfy the element. The words in furtherance of ask whether the particular services were employed to advance the wrongdoing. A forged financial statement mailed to investors by the client alone leaves the lawyer outside the exceptions, while the same statement bound into an opinion letter the lawyer wrote puts the lawyer's work in the investors' hands.
A. v. B. shows the gate operating inside a joint engagement. New Jersey's RPC 1.6(c) permitted a lawyer to reveal information to rectify the consequences of a client's criminal, illegal, or fraudulent act “in furtherance of which the lawyer's services had been used,” a condition close to the Model Rule's.25 The firm was planning the estates of a husband and wife, and the court reasoned that each spouse could expect the other to disclose information material to the distribution of their estates, including children who were contingent residuary beneficiaries. The husband's deliberate omission of his illegitimate child breached that expectation, and in effect he used the firm's services to defraud his wife in the preparation of her estate.26 The connection to the firm was functional. The deception operated inside the process the firm conducted, and the resulting harm was an estate plan prepared on incomplete information. Two features set the case apart from the opinion-letter pattern: no false statement was made, and the victim was herself the firm's client. Because the court construed New Jersey's broader rule, the case illustrates how the gate can be met without fixing the Model Rule's outer boundary.
The two paragraphs word the timing of the use differently. Paragraph (b)(2) reaches a client who “has used or is using” the services, because it addresses wrongdoing that is still to be prevented, and the services may be working on it at the moment the lawyer decides whether to speak.27 Paragraph (b)(3) says only that the client “has used” them, because it addresses injury resulting from a crime or fraud already committed, so the use lies in the past.28 The same wording explains why a lawyer retained after a fraud is complete, solely to defend the client against its consequences, does not satisfy the gate: services rendered after the wrong cannot have furthered it. The organizational-client rule draws a related line by role. Where the lawyer was retained to investigate an alleged violation of law, or to defend the organization or a constituent against a claim arising from one, Rule 1.13(d) withdraws the permission that Rule 1.13(c) otherwise grants to disclose confidential information outside the organization.29 Later sections on preventing, mitigating, and rectifying injury show how the difference in tense combines with the timing of the injury.
The privilege's crime-fraud exception offers a parallel, though it is a separate rule with a separate consequence. A client who uses legal services to advance or conceal a crime or fraud forfeits the privilege, with or without the lawyer's knowledge, because the client has perverted the relationship toward an illegitimate end. A client who retains a lawyer to defend against past wrongdoing keeps the privilege.30 The Model Rule's text frames its element by what the client did with the services and adds no requirement that the lawyer knew the purpose while performing the work.31 The privilege cases therefore guide the idea of misuse, but an answer should apply the Model Rule's wording and treat the privilege rule as an analogy. Whether a communication that fits a Rule 1.6(b) exception remains privileged is a separate question, taken up in a later subsection.