Please note: In some cases, practitioners (such as accountants, HR, attorneys etc) are some of the first to know about potential scam or fraud or layoff, since they are privy to confidential information regarding their clients and their clients' businesses. Practitioners have ethical responsibilities to many different parties, both internal and external to the company. Practitioners are ethically obligated to treat client information as confidential and refrain from unauthorized disclosure. Practitioners should realize that they may be required to disclose business information about a client upon the order of a subpoena.

What do practitioners do when there is a possibility of crime or fraud occurring?

As per The Canadian Bar Association (2021), if a client is seeking legal advice to facilitate the commission of a crime or a fraud, the information provided by the client is not covered by solicitor-client privilege. This is characterized as an exclusion not an exception, as the nature of these communications completely negates the privilege that would ordinarily attach to them. Some courts have moved to expand the exclusion for crime and fraud to apply the same reasoning to some torts. This area of the law is uncertain and controversial, and awaits clarification from appellate courts (see Dodek, supra, FN 2, at 11 to 14). The Law Society Codes of Conduct do not recognize a crime-fraud exception to the duty of confidentiality. Where the public safety exception does not apply, it may well be that solicitor-client privilege does not exist, yet the Law Society code will prohibit voluntary disclosure.

Reference:

The Canadian Bar Association. 2021. The Ethics and Professional Responsibility - FAQ - PRIVILEGE AND CONFIDENTIALITY FOR LAWYERS IN PRIVATE PRACTICE. Retrieved from https://www.cba.org/Publications-Resources/Practice-Tools/Ethics-and-Professional-Responsibility-(1)/Solicitor-Client-Privilege/FAQs