A Hidden Assault on the Corporate Attorney-Client Privilege

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On November 12, 2008, the Federal Acquisition Regulation Councils issued a final rule amending Federal Acquisition Regulation (FAR) 52.203-13 to “amplify the requirements for a contractor code of business ethics and conduct, an internal control system, and disclosure to the Government of certain

violations of criminal law, violations of the civil False Claims Act, or significant overpayments.” The rule provides for the suspension or debarment of a contractor for knowing failure by a principal to disclose in a timely manner certain violations of criminal law, violations of the civil False Claims Act, or significant overpayments. This new rule became effective December 12, 2008, and requires reporting misconduct under contracts until three years after final payment.

This Note first reviews the longstanding doctrine of the corporate attorney-client privilege. Next, this Note discusses the erosion of that doctrine by the U.S. Department of Justice (DOJ). This Note then considers the terms “full cooperation” and “mandatory disclosure” within the context of the FAR clause. This Note concludes with a discussion of the future of the

corporate attorney-client privilege in light of the new FAR clause.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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