Ethics

Split Decisions


Illustration by Dave Cutler

But this kind of situation creates potential dilemmas for the lawyer representing multiple clients in the same or related cases. In particular, the lawyer must decide what to do when he or she acquires confidential information from one client that must be revealed to another client in order to effectively carry out that representation. In such a case, would the law­yer have to withdraw from one or both of the repre­sentations to avoid adversely affecting the interests of one or both clients?

Maybe, or maybe not, says the ABA Standing Com­mittee on Ethics and Professional Responsibility in its Formal Opinion 08-450 (April 9, 2008) (PDF). The answer turns on a balance between the lawyer’s duty to preserve the confidentiality of information related to the representation under Rule 1.6 of the ABA Model Rules of Professional Conduct, and the duty under Model Rule 1.4 to provide information to a client “to the extent reasonably necessary to permit the client to make informed decisions regarding the representation.” (The Model Rules are the basis for most state professional conduct codes that directly govern lawyers.)

The opinion identifies two key points in a case where it is most important to address potential conflicts between the lawyer’s duties under Model Rules 1.4 and 1.6. The first point occurs when the lawyer undertakes the joint representation. That is the best time to address the scope of representation for each client and the intentions of the clients regarding confidentiality.

Reaching an understanding on these points is especially important in the insurance context because, the opinion notes, in some jurisdictions “a lawyer engaged by an insurance carrier to defend an insured is deemed to represent both the insured and the insurer, and in other ju­­risdictions such a lawyer is deemed to represent only the insured.”

“The second point in time at which the lawyer’s duty concerning confidential information must be ad­dres­sed,” states the opinion, “is when the lawyer comes to understand that disclosure to one client will be harmful to the other client’s interest.” This is when it is most im­portant for the lawyer to resolve conflicting obligations under Model Rules 1.6 and 1.4, according to the committee.

TOUGH CHOICES

The opinion states that, absent an advance waiver or an express agreement among the lawyer and the clients that satisfies the informed consent standard set forth in Model Rule 1.6(a), the lawyer is prohibited from revealing information related to the representation of a client to anyone if that information may be harmful to the client if it is in the hands of another client or a third person.

At that point, the lawyer may not have many options short of withdrawal from at least one of the representations. If withholding information would cause the lawyer to violate his or her duty to a client under Model Rule 1.4, the lawyer must withdraw from representing the client to avoid a violation of Rule 1.7, which prohibits lawyers from engaging in representations that create concurrent conflicts of interest. In those circumstances, states the opinion, “whether any agreement made before the lawyer understands the facts giving rise to the conflict may satisfy ‘informed consent’ (which presumes appreciation of ‘adequate information’ about those facts) is highly doubtful.”

Ultimately, the lawyer may have no choice but to with­draw from representing all the parties under Model Rule 1.16, which requires that the obligation to withdraw be evaluated separately with respect to each client.

That may not have been the outcome anticipated by either the lawyer or the clients at the start of the case, but sometimes it’s the best thing for everyone.

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