United States v. Kovel, 296 F.2d 918 

U.S Court of Appeals for the Second Circuit

1961

Chapter

13

Title

Privileges

Page

589

Topic

The attorney-client privilege extends to non-lawyers who work for the attorney.

Quick Notes

Kovel, an accountant employed by a law firm that specialized in tax law, was called before a grand jury to testify against a client for whom defendant had done work. A judgment holding defendant in contempt for failing to answer questions was vacated and remanded because defendant may have had grounds to assert the attorney-client privilege. The presence of defendant while the client was relating a complicated tax story to a lawyer would not destroy the attorney-client privilege, as long as the communication was made in confidence for the purpose of obtaining legal advice. Although defendant did not offer any proof supporting the privilege claim, the uncertainty as to the applicable legal principles, the fixed view of the judge, and the haste with which the proceedings were conducted, extenuated failure of defendant's counsel to make a proper offer of proof. The case was remanded for a determination of facts.

Court - Privileges must include all the person who act as an attorneys agent

Court - We cannot regard the privilege as confined to menial or ministerial employee.

Court - Accounting concepts are a foreign language

Court - Lawyer ask client to tell story to accountant (Privilege is Protected)

Court - Communication made in confidence

o         What is vital to the privilege is that the communication be made in confidence for the purpose of obtaining legal advice from the lawyer.

Court - Seeking Accountant before consulting attorney (Not Protected)

o         If what is sought is NOT legal advice but only accounting service, or if the advice sought is the accountant's rather than the lawyer's, no privilege exists.

Book Name

Evidence: A Contemporary Approach.  Sydney Beckman, Susan Crump, Fred Galves.  ISBN:  978-0-314-19105-2.

Issue

o         Whether the attorney-client privilege extents to non-lawyers that works for the attorney?  Yes.

Procedure

Trial

o         Defendant appealed a sentence of the United States District Court for the Southern District of New York that was imposed upon defendant for criminal contempt after he refused to answer a question asked in the course of an inquiry by a grand jury.

Appellant

o         The court vacated judgment and remanded for a determination of whether specific communications between the defendant and client were privileged as legal advice sought in confidence, because defendant's presence did not destroy the attorney-client privilege

Facts/Cases

Discussion

Key Phrases

Rules/Laws

Pl - United States

Df - Kovel

Description

o         Kovel, and employee of a law firm, refused to answer questions in front of a grand jury.

Details

o         Kovel is a former Internal Revenue agent having accounting skills.

o         Since 1943 he has been employed by Kamerman & Kamerman, a law firm specializing in tax law.

o         A grand jury in the Southern District of New York was investigating alleged Federal income tax violations by Hopps, a client of the law firm; Kovel was subpoenaed to appear on September 6, 1961, a few days before the date, September 8, when the Government feared the statute of limitations might run.

Kovel cannot disclose without permission

o         The law firm advised the Assistant United States Attorney that since Kovel was an employee under the direct supervision of the partners, Kovel could not disclose any communications by the client of the result of any work done for the client, unless the latter consented.

Privilege does not extend to a non-lawyer

o         The Assistant answered that the attorney-client privilege did not apply to one who was not an attorney.

o         Kovel was held in contempt for not answering questions in front of grand jury.

Court - Privileges must include all the person who act as an attorneys agent

o         The assistance of these agents being indispensable to his work and the communications of the client being often necessarily committed to them by the attorney or by the client himself, the privilege must include all the persons who act as the attorney's agents.

Court - We cannot regard the privilege as confined to menial or ministerial employee.

o         Thus, we can see no significant difference between a case

o    where the attorney sends a client speaking a foreign language to an interpreter to make a literal translation of the client's story;

o    a second where the attorney, himself having some little knowledge of the foreign tongue, has a more knowledgeable non-lawyer employee in the room to help out;

o    a third where someone to perform that same function has been brought along by the client; and a fourth where the attorney, ignorant of the foreign language, sends the client to a non-lawyer proficient in it, with instructions to interview the client on the attorney's behalf and then render his own summary of the situation, perhaps drawing on his own knowledge in the process, so that the attorney can give the client proper legal advice.

Analogy

Court - Accounting concepts are a foreign language

o         Accounting concepts are a foreign language to some lawyers in almost all cases, and to almost all lawyers in some cases.

Privilege should not be destroyed

o         The presence of an accountant, whether hired by the lawyer or by the client, while the client is relating a complicated tax story to the lawyer, ought not destroy the privilege, any more than would that of the linguist in the second or third variations of the foreign language theme discussed above.

Accountant is necessary

o         The presence of the accountant is necessary, or at least highly useful, for the effective consultation between the client and the lawyer which the privilege is designed to permit.

Court - Lawyer ask client to tell story to accountant (Privilege is Protected)

o          If the lawyer has directed the client, either in the specific case or generally, to tell his story in the first instance to an accountant engaged by the lawyer, who is then to interpret it so that the lawyer may better give legal advice, communications by the client reasonably related to that purpose ought fall within the privilege; there can be no more virtue in requiring the lawyer to sit by while the client pursues these possibly tedious preliminary conversations with the accountant than in insisting on the lawyer's physical presence while the client dictates a statement to the lawyer's secretary or in interviewed by a clerk not yet admitted to practice.

Court - Communication made in confidence

o         What is vital to the privilege is that the communication be made in confidence for the purpose of obtaining legal advice from the lawyer.

Court - Seeking Accountant before consulting attorney (Not Protected)

o         If what is sought is NOT legal advice but only accounting service, or if the advice sought is the accountant's rather than the lawyer's, no privilege exists.

Arbitrary Line to whom client communicates first.

o         We recognize this draws what may seem to some a rather arbitrary line between a case where the client communicates first to his own accountant (no privilege as to such communications, even though he later consults his lawyer on the same matter, and others, where the client in the first instance consults a lawyer who retains an accountant as a listening post, or consults the lawyer with his own accountant present.

Court - Privilege exists where lawyer needs outside help.

o         But that is the inevitable consequence of having to reconcile the absence of a privilege for accountants and the effective operation of the privilege of client and lawyer under conditions where the lawyer needs outside help.

o         We realize also that the line we have drawn will not be so easy to apply as the simpler positions urged on us by the parties --  the district judges will scarcely be able to leave the decision of such cases to computers; but the distinction has to be made if the privilege is neither to be unduly expanded nor to become a trap.

Rules

Class Notes