Rectification of Client Fraud: Death and Revival of a Professional Norm

Abstract

As now is generally known, the American Bar Association has adopted a new set of recommended Rules of Professional Conduct (Rules), to supplant the present Code of Professional Responsibility (Code). As is also generally known, one of the most intensely debated issues in the new Rules was the problem of client fraud-that is, the problem of what a lawyer properly should do when he discovers that a transaction he is handling for a client is tainted with fraud. In adopting the new Rules, the ABA rejected the proposal of the Kutak Commission and replaced it with an amendment formulated by a group led by the American College of Trial Lawyers and the ABA Section of General Practice. The debate and the adoption of the amendment excited a great deal of public attention, much of it criticism that the amendment sanctions cover up of client fraud.