Lobbying efforts are gathering pace to ditch the US Justice Department's policy of linking a waiver of legal professional privilege to sentence reduction in corporate fraud cases, the conference heard.



Proposals from the US Sentencing Commission are currently before Congress that would see the waiver requests ditched in favour of other forms of co-operation with investigating authorities. The system applies to overseas companies operating in the US.



Incoming ABA President Karen Mathis described waiver demands as being 'counterproductive' and 'very damaging and harmful to us all'.



William Ide, chairman of the ABA's task force on attorney-client privilege, told delegates that the ABA had written to the US Attorney-General, Alberto Gonzales, asking for the waiver requests to be dropped.



He was encouraged by Edward Kubo, US Attorney for Hawaii, who told the conference: 'There is a wide recognition among many US attorneys that this is no longer a knee-jerk reaction... and that these situations must be looked at on a case-by-case basis. The Justice Department is sensitive to the ABA's concerns and is open to a dialogue to find a middle ground.'



However, Mr Kubo backed away from suggestions that requests should be scrapped altogether.



The ABA proposes that, in the future, co-operation with the likes of the FBI and Securities and Exchange Commission - for the purposes of consideration on sentencing - should take the form of furnishing facts, witnesses, and explaining documents and other evidence.



Mr Ide warned that companies are increasingly reluctant to use outside lawyers to investigate allegations of wrongdoing because of concerns that anything they tell the lawyers could be handed to government investigators.



He also pointed to one 'nasty development' whereby investigators and US attorneys have told employers they must sack employees who invoke the right not to incriminate themselves at trial. The Justice Department also considers it to be uncooperative if companies provide legal advice and lawyers to employees charged with corporate misconduct.