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Lawyers Win in Fight for Client Confidentiality Over Cash Awards

May 26, 2011—Yesterday’s Securities and Exchange Commission decision not to encourage lawyers to divulge confidential client information is “a welcome recognition of the critical importance of the attorney-client privilege and client confidentiality,” said Stephen N. Zack, president of the 400,000-member _.

Under the new rule, issued under the Dodd-Frank Act, whistleblowers who voluntarily provide the SEC with original information regarding violations of the federal securities laws may be entitled to receive substantial cash awards. But the final version of the rule makes it clear that lawyers will not be eligible to receive such payments if they have divulged privileged or confidential information they obtained from clients during the course of their professional representation in violation of the lawyer’s ethical obligations.

The attorney-client privilege enables both individual and corporate clients to communicate with their lawyers in confidence, and encourages clients to seek out and obtain informed guidance regarding compliance with the law.  The privilege also encourages candid communications between corporate clients and their lawyers in connection with internal investigations designed to identify and remedy possible violations of law, to the benefit of corporate institutions, the investing public and society-at-large.

“The integrity of the lawyer-client relationship is sacred,” Zack said. “The erosion of a lawyer’s duty of confidentiality, either by weakening its provisions or by creating incentives for lawyers to disregard their professional obligations, would undermine the quality of the lawyer-client relationship and the effectiveness of the privilege, deny the client its right to effective counsel, and reduce, rather than increase, compliance with the law.”

With nearly 400,000 members, the _ is the largest voluntary professional membership organization in the world.  As the national voice of the legal profession, the ABA works to improve the administration of justice, promotes programs that assist lawyers and judges in their work, accredits law schools, provides continuing legal education, and works to build public understanding around the world of the importance of the rule of law.

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Comments (2)

  • Anonymous
    10:54 AM June 18, 2011

    Minnesota Justice System needs fixing .its not about your case,or Attorney -Client confidentiality ;or what you know : it is about who you know or how much weight do your case carry,to make and offer to the opposing party’That leave the party in Limbo no answers and case is closed,you try to get answers you send the judges letter you send banks letters you send lawyers letters and not one respond like you are a nobody it is a good thing God have my back because the justice System do not its four years now I am just a nobody ,trying to tell every body, about somebody, that should listen to every body ,Minnesota Justice System needs fixing .good people are being throw in the fire , belive me iam not alone there are thousands of us .I will not vote again .it serve no one .and for a bank you knew nothing about; give a stranger that live in another state a mortage on your house and your own attorney did not tell you,fix this system

  • Anonymous
    11:16 AM June 18, 2011

    Any time you have a attorney that states to the opposing party, he will use a legal theory to off set the courts, where his client will will not received no rewards from any party and you are the client ,there is not one attorney in Minnesota that will touch this case ,Some day a honest lawyer will come along and pick it up until than fix the system