Written Testimony of Demitrious Dimitriou, Richard Flamm and Mark L. Tuft
Bar Association of San Francisco
January 26, 1999
[nmoore@crab.rutgers.edu]
Nancy J. Moore
Chief Reporter
ABA Commission on Evaluation of
Rules of Professional Conduct
Rutgers School of Law
Fifth and Penn Streets
Camden, New Jersey 08102
Re: Comments on Proposed Revised Rule 1.6---Draft No.6
Dear Professor Moore:
The Bar Association of San Francisco responds to the request for written comments on proposed revised model rules of professional conduct in conjunction with the ABA Commission's public hearing on February 4, 1999 at the ABA mid-year meeting in Los Angeles. The Bar Association of San Francisco is a member of the Advisory Council and its Legal Ethics Committee is involved in analyzing the work of the Commission.
The Bar Association of San Francisco urges the Commission to disapprove Draft No. 6 of proposed revised Rule 1.6 and to re-examine the policy considerations that underlie the lawyer's duty of confidentiality.
Our Association is particularly concerned with the proposed revisions to Rule 1.6 (b), which are at cross purposes to the societal importance of the client-attorney relationship and the role of the lawyer in that relationship. The common law has consistently recognized the need for the lawyer to maintain inviolate the trust and confidence of the client which is the hallmark of the client-lawyer relationship. The public policy of creating a confidential relationship that encourages frank discussions between the client and the lawyer on all matters, including alleged crimes and civil frauds, traditionally outweighs the role of the lawyer as a whistle blower in society. In the view of this Association, practicing lawyers perform a greater social good in counseling clients confidentially about their legal problems, including clients who are viewed as acting wrongfully. The extent to which a lawyer is permitted to disclose a client's confidence would inhibit the client from revealing material information to the lawyer and the lawyer's ability to properly counsel the client. It is difficult for this Association to conceive how a lawyer could properly present a client and at the same time act as provided in proposed Rule 1.6(b)(2) or (3) consistent with the lawyer's duties of loyalty and competence.
The proposed revisions to the rule represent a major departure from normative professional standards and do not appear to represent a "minimalist" approach which the Commission has stated to be its charge in considering the model rules. The broadly defined disclosures adverse to the client appear to be an attempt to protect the lawyer's interest where the client is believed to have "abused" the client-lawyer relationship. Academics may view these amendments as enhancing the image of lawyers and the legal profession, but in actual practice promulgating such a rule would more likely result in greater harm to clients, create more conflicts of interest and increase civil liability.
This Association recommends that the Commission take a different conceptual approach to reconciling the attorney's duty of confidentiality with the attorney's obligation to the legal system by focusing on the lawyer's conduct rather than on the conduct of the client. We believe that addressing the rules of professional conduct that govern the lawyer's conduct in the relationship, such as Rule 1.2(d) and (e), 1.16(a)(1) and (b)(1) and (2), Rule 2.1, Rule 3.3, Rule 4.1 and Rule 8.4, is more appropriate than focusing on the client's conduct as a basis for creating broad inroads into the duty of confidentiality and altering the lawyer's role in the client-attorney relationship from counselor to whistle blower. It appears that the underlying concern warranting the proposed revisions to Rule 1.6 is the inability of the lawyer to abide by other rules of professional conduct and ethical principles to avoid the situations raised in subparts (b) and (c). As in the case of client perjury and other wrongful client conduct, competent attorneys do not serve in the role of judge or jury of their client's conduct; rather, they exercise independent professional judgment in representing the client and in rendering candid advice. In the view of this Association, there is a greater need today to protect the privacy interests of individual clients and to preserve the duty of confidentiality rather than attempting to revitalize the Kutak Commission's original proposals which were rejected by the House of Delegates in 1983. Likewise, the proposed amendment to Rule 1.6(b) permitting lawyers to disclose confidential information to rectify consequences of a client's criminal or fraudulent act was rejected by the House of Delegates in 1991. There is an absence of empirical evidence to justify revisiting such restrictions on the duty of confidentiality in modern practice.
We appreciate the opportunity to submit these comments and recommendations, which we hope the Commission will find useful in its consideration of the Model Rules. We respectfully request the opportunity for a representative of our Association to address these issues at the public hearing in Los Angeles on February 4, 1999.
Respectfully submitted,
260234.1
From: rflamm [rflamm@vdn.com]
Sent: Monday, January 11, 1999 3:36 PM
To: richardlee@earthlink.net; minkus@ggu.edu; jaronslaw@jps.net; dimitriou@nomos.org; pphillip@rjoq.com; pwvapnek@townsend.com
Subject: Rule 1.7 letter
Mark:
Here is a proposed draft of the Rule 1.7 letter, which I hope to e-mail to
Joan Firestone shortly. I apologize for the delay in getting this to you.
In the letter I have tried to take a "minimalist" approach, focusing only
on that topic with which I think everyone in the study group agreed: that
the conflicts of interest rules may benefit from having the "general"
conflict rule "broken out" and separated from what would be a new rule
covering direct adversity. I have deleted reference to my more left of
center views on the conflicts rules, about which the study group has not
achieved any consensus.
REF
January 11, 1999
nmoore2crab.rutgers.edu
Nancy J. Moore
Rutgers School of Law Fifth and Penn Streets
Camden, NJ 08102
Re: Rule 1.7
Dear Professor Moore:
We previously wrote you a letter expressing our belief that Rule 1.7 might
benefit from additional analysis. One problem we perceive is that Rule 1.7
does not, in our opinion, truly set forth a "general" conflicts rule. The
word "general" is defined in Webster's Dictionary as "involving or
applicable to the whole;" and, alternatively, as "concerned or dealing with
universal rather than particular aspects." We think that Model Rule 1.7,
as presently constituted, would not qualify as a "general" rule under
either definition.
On the one hand, Rule 1.7 does not deal only with "universal" aspects; but
focuses, in its comments, on particular issues (such as "special
considerations in joint representation"). On the other hand, Rule 1.7 is
not "applicable to the whole" conflict realm, because it does not directly
address the most common conflict situation: that in which a lawyer acts
adversely to the interests of a former client. Former clients are
mentioned only insofar as the lawyer's prior representation of them may
limit the lawyer's present representation of a current client. Neither the
rule nor the comments to it address the typical conflict concern that
arises when a lawyer acts adversely to the interests of a former client in
the same or a substantially related matter - a possible breach of the
lawyer's duty to maintain the former client's confidences.
We think that clarity would be fostered if, at a minimum, the three
current conflicts rules (1.7, 1.8 and 1.9) were to be reconstituted as four
(1.7, 1.7x, which would have to be renumbered, 1.8, and 1.9). Rule 1.7
would continue to provide the "general" rule, but would be amended to
include conflicts involving former clients. We suggest the following
possible language:
(a) A lawyer shall not represent a client if the representation involves a
conflict of interest. A conflict of interest exists if:
(1) the representation of one current client will be directly adverse to
another current client;(2) there is a significant risk that the representation of one or more
current clients will be materially limited by the lawyer's own interests or
the lawyer's duties to another;(3) the lawyer represents a person in a matter that is the same as, or
substantially related to, a matter in which the lawyer formerly represented
a client whose interests are materially adverse to those of the lawyer's
current client...
The comments to Rule 1.7 would be limited to those subjects that are truly
common to the conflicts universe (e.g. "consentability"). Comments which
pertain only to a specific type of conflict would be transferred to the
specific rule which discusses that type of conflict. By way of example,
Rule 1.7x would focus on the subject of Rule 1.7(a)(1): direct adversity.
Some of the comments which currently follow Rule 1.7 would be transferred
to Rule 1.7x, as they address the situation where the representation of one
current client is directly adverse to the interest of another (e.g., comments 1-4).
Rule 1.8 would focus on the subject of Rule 1.7(a)(2) - that specific
type of conflict which arises when there is a significant risk that the
representation of one or more current clients will be materially limited by
the lawyer's own interests or the lawyer's duties to another. Some of the
comments which currently follow Rule 1.7 could be transferred to Rule 1.8,
as they also pertain to the situation where there is a significant risk
that the representation of one or more current clients might be materially
limited by the lawyer's own interests or the lawyer's duties to another.
Finally, Rule 1.9 would focus, as it traditionally has, on that type of
conflict which arises when a lawyer represents a person in a matter that is
the same as, or substantially related to, a matter in which the lawyer
formerly represented a client whose interests are materially adverse to
those of the lawyer's current client.
We appreciate the opportunity to submit these comments, which we hope the
Commission will find useful.
Very truly yours,
Jonathan Arons
RULE 1.8 DRAFTING SUGGESTIONS
This memorandum is intended to recommend specific language which would implement the various suggestions made in my letter to Nancy Moore of December 4, 1998.
Proposed Rule 1.8(d) - Literary Rights:
Delete Proposed Rule 1.8(d) and add the following comment to Rule 1.8(a)[2]: An agreement by which a lawyer acquires literary or media rights concerning the conduct of the representation creates a conflict between the interest of the client and the personal interest of the lawyer. Measures suitable in the representation of the client may detract from the publication value of an account of the representation therefor the arrangement must conform to Rule 1.5 and Rule 1.8(j). THIS PROPOSED COMMENT IS BASED UPON THE EXISTING COMMENT TO PROPOSED RULE 1.8(d)
Proposed Rule 1.8(e) - Financial Assistance:
(e) A lawyer shall not provide financial assistance to a client in connection with the lawyer=s representation of client
pending or contemplated litigation , except that:
(1) a lawyer may advance reasonably necessary
court costs and expenses
of litigation relating to the representation, the repayment of which may be contingent on the outcome of the representation
matter; and
COMMENT:
[7] This rule would permit a lawyer to advance reasonably necessary dispute resolution costs and expenses, including the expenses of medical examinations and cost of obtaining and presenting evidence, because these advances are indistinguishable from allowing contingent fees and are necessary to insure access to the courts or other dispute resolution processes. Similarly, this rule permits lawyers representing indigent clients to pay court costs and litigation or other dispute resolution process expenses whether or not these funds will be repaid. This rule would also permit a lawyer to advance or loan funds or render legal services to a start up business client the repayment of which is dependent upon the success of the business. All of the foregoing is subject to complying with Rule 1.8(a).
Proposed Rule 1.8(f) - Third-Party Payment or Direction
[21] Line 38: Ajudgment on behalf of the client. In those instances where there is a tripartite relationship, for example a lawyer who is retained by an insurance company to represent an insured under the provisions of the insured=s policy of insurance, the lawyer has two clients, the insurer and the insured. If the insurer
For example, an insurance company that pays the lawyer to defend an insured in an action under a liability policy may direct directs the lawyer not to take an additional deposition
If and the lawyer reasonably believes that failure to take the deposition will not...@
Proposed Rule 1.8(g) Aggregate Settlements
15a In those situations in which a lawyer represents a large number of individual clients having common claims against a defendant(s), it would be appropriate for the attorney to provide in the initial retainer agreement, provisions for resolving disputes among the individual clients and for allocation of aggregate settlements. For example, assume an attorney represents 85 out of 100 homeowners in a common subdivision having common claims [a lawsuit by individual homeowners or small groups of homeowners would be prohibitively costly] against the subdivision construction company for negligent construction. The attorney=s initial retainer agreement could provide that the entire group would be bound by any settlement offer in which at least 75% of the group found acceptable and that the settlement would be allocated by binding arbitration if less than 75% of the group could agree upon a proposed allocation of the settlement proceeds. The retainer agreement could also contain additional provisions dealing with the management of the litigation, allocation of costs and other communal issues relating to the litigation. Written informed consent would be required of all homeowners including a recommendation that each homeowner seek the advice of independent council before signing the retainer agreement.
Proposed Rule 1.8(h) - Limiting Liability and Settling Malpractice Claims
COMMENT:
Line 27: Amaintenance of adequate liability insurance. There is a question as to the efficacy of the use of limited liability legislation by law firms as an effective shield for partner vicarious liability for a partner=s malpractice. Lawyers should examine their own applicable laws to determine if such legislation [or court rule] supersedes the provisions of this Rule.
Nor This paragraph also does not prohibit an agreement in accordance...@
Proposed Rule 1.8(k) Attorney/Client Sexual Relationships
This rule should be deleted and the following comment added to Rule 1.7
COMMENT:
[12a] The following comment should replace the existing comment "A sexual relationship between lawyer and client may involve an unfair exploitation of the lawyer's fiduciary position in violation of the lawyer's fiduciary obligations and in violation of the lawyer's basic ethical obligation not to use the trust of the client to the client's disadvantage. Such a relationship also presents a significant danger that the lawyer's emotional involvement would impair the lawyers's exercise of appropriate independent professional judgment on behalf of the client."