Footing the Bill: Paying the Legal Costs of Criminal Proceedings: Because of the Possibility That Insurance Will Not Cover Defense Costs, Corporate Counsel Must Take Steps to Protect Corporate Interests

By Holland, Michael J. | Defense Counsel Journal, January 2002 | Go to article overview

Footing the Bill: Paying the Legal Costs of Criminal Proceedings: Because of the Possibility That Insurance Will Not Cover Defense Costs, Corporate Counsel Must Take Steps to Protect Corporate Interests


Holland, Michael J., Defense Counsel Journal


FOR A corporation accustomed to having its in-house counsel handle legal affairs and its insurance carrier to provide outside counsel for matters routinely covered under its comprehensive general liability policy, the receipt of a subpoena or letter from criminal authorities indicating an interest in discussing certain matters with employees or officers of the corporation may come as quite a shock.

FIRST THINGS FIRST

The first step is to determine how to protect the rights of the corporation, its officers, directors and employees during the criminal investigation process. Corporate counsel must first ascertain whether the corporation is merely a source for information or a potential target of the criminal investigation. The answer to this question will determine the response of the corporation.

Many corporate officers have difficulty in accepting the fact that the company may be the target of a criminal investigation based on either a turncoat employee bringing a "whistle-blower" action or by running afoul of some federal or state regulation that provides for criminal penalties in the event of non-compliance. The first reaction of a harried corporate executive may be to "tell all" and "get it off our chest." But this may not be the right response.

CONFLICTS OF INTEREST

After determining whether the corporation is either the target or merely a source for information, corporate counsel must consider whether there is any potential conflict between the legal interests of corporate executives and corporate employees. If so, separate counsel for each probably would be required so as to avoid any potential conflict of interest. The corporate in-house attorney probably would be disqualified from acting on behalf of either the corporate officers or the corporate employees.

If the in-house counsel conducts an internal investigation in response to the inquiry from the criminal authorities, the corporate employees who are interviewed must be told that the company attorney is not their attorney and that the role of the corporate counsel is simply to find facts on behalf of the corporation. Corporate employees should understand that they may find it necessary to retain their own counsel if they have legal questions concerning their own situations.

The corporation's in-house attorney should avoid giving legal advice to employees, officers or directors as to whether they should agree to speak with legal authorities, to testify with or without a subpoena or to produce any documents within their possession.

INDIVIDUAL EMPLOYEES AS DEFENDANTS

If individual employees of the corporation are named as defendants, a delicate problem is presented, because it is in the interests of the corporation not to have its individual employees pointing fingers at either their fellow employees or the corporation. There is certainly the potential of a conflict of interest if the same attorney representing the corporation seeks to undertake the representation of the individual employees. An investigation by the corporate attorney should determine, at least preliminarily, any potential conflict or diversion of interest among the employees and between the employees and the corporation.

In civil litigation, the corporate attorney generally is appointed to represent the interests of the employees, as well as the corporation, as long as the facts underlying the suit and the basis of the defense are undisputed. If, however, the employees are named in a criminal suit, there are more substantial questions of conflict in joint representation, and in those cases it is likely that employees would have to retain their own criminal counsel.

In civil actions, the ultimate interests of the corporate employer and the employees are the same--this is, to avoid or limit their potential liability. In a criminal case, a conflict of interest would exist where a lawyer represents both an employer and an employee. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Footing the Bill: Paying the Legal Costs of Criminal Proceedings: Because of the Possibility That Insurance Will Not Cover Defense Costs, Corporate Counsel Must Take Steps to Protect Corporate Interests
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.