Lawyers May Break Attorney-Client Privilege on Dirty Business

This is a partial transcript of The Big Story With John Gibson, August 13, 2003, that has been edited for clarity. Click here to order the complete transcript.

JOHN GIBSON, HOST: Dirty businessmen have a new whistleblower to worry about — their own lawyers. The American Bar Association (search) has approved the change in the rules that govern attorney-client privilege (search). Lawyers are now allowed, even encouraged, to break confidentiality to prevent corporate fraud — Enron, get it?

Here with his own take on loose-lipped lawyers, FOX News senior judicial analyst Judge Andrew Napolitano. So if you are Enron (search) and you are busy fleecing the stockholders, you can't rely on your own lawyers to protect you?

JUDGE ANDREW NAPOLITANO, FNC SENIOR JUDICIAL ANALYST: That's right. The old rule [is still in effect] because what the ABA did was express the intention of lawyers. The states actually have to change these rules. But the rule — as it now is — is that if the lawyer knows that what the client is doing or is about to do is going to take innocent human life, then the lawyer may reveal it… Added to [this old rule] is going to [be the new rule that if what the client is doing is going to] cause financial harm to a third person — that is, not the lawyer and not the client — [then the lawyer may reveal it].

GIBSON: Alright. But this is aimed at the lawyers who were advising the big corporate clients, whether they were Global Crossing (search), WorldCom (search), Enron, any of them.

NAPOLITANO: Look, when Enron went down, Arthur Anderson (search) went down with it. But the word in the legal community was, “Where were the lawyers?” We crucified Arthur Anderson and put it out of business because of what it helped Enron do to the shareholders and to the vendors. We lost billions. But where were the lawyers? The lawyers were there doing their job. They knew what was going on and they said nothing. Now they are not required to speak, but they may speak without liability for breaking that attorney-client privilege.

GIBSON: And, therefore, if they don't speak, they're just as much a part of the conspiracy as the crooked executives who are on their way to jail?

NAPOLITANO: Morally, yes, but legally, no.

GIBSON: No?

NAPOLITANO: Right, the rule does not go as far as John Gibson would like the rule to go. It doesn't impose liability for silence. It only removes liability for speaking.

GIBSON: Wouldn't you know it? Judge Andrew Napolitano, thanks very much.

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