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Ethics Opinion

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C-229

May, 1983

SYLLABUS

    A lawyer who receives unprivileged knowledge of another lawyer's violation of the Code of Professional Responsibility from persons other than the lawyer's client, is obligated to report that misconduct to the Attorney Grievance Commission, even though the lawyer's client instructs the lawyer to remain silent because the disclosure may be detrimental to the client's economic interests.

    References: MCPR DR 1-102, DR 1-103(A), DR 4-101; CI-572.

TEXT

A lawyer is retained to investigate the delay in the settlement of an estate because the beneficiaries suspect wrongdoing. During the investigation the lawyer contacts the lawyer for the estate, who admits unauthorized use of estate funds for personal gain. The investigating lawyer, with the consent of the beneficiaries, negotiates a settlement that will repair the economic injury to the estate. The beneficiaries then advise that they wish to take no further action against the estate lawyer. The investigating lawyer asks whether there is nevertheless a duty to disclose the conduct of the estate lawyer.

MCPR DR 1-102 provides in part:

    "(A) A lawyer shall not:

      ". . .

      "(4) engage in conduct involving dishonesty, fraud, deceit, or misrepresentation.

      "(5) engage in conduct that is prejudicial to the administration of justice.

      "(6) engage in any other conduct that adversely reflects on his fitness to practice law."

While the committee does not sit as a fact-finding body, it appears from the information provided that the attorney for the estate has violated MCPR DR 1-102(A) and MCPR DR 9-102 regarding preservation of the identity of client funds.

MCPR DR 1-103(A) states:

    "A lawyer possessing unprivileged knowledge of a violation of DR 1-102 shall report such knowledge to a tribunal or other authority empowered to investigate or act upon such violation."

MCPR DR 1-103(A) imposes a duty upon all lawyers to report another lawyer's misconduct, except where the information is protected as a privileged communication. In this instance, the "tribunal" would be the probate court having jurisdiction over the estate, and the "other authority empowered to investigate or act upon such violation" would be the Attorney Grievance Commission. MCPR DR 1-103(A) speaks in mandatory terms requiring disclosure of "unprivileged knowledge."

In CI-572 the committee opined that where a lawyer discloses a personal violation of MCPR DR 5-103(B) concerning advancing funds to the client during litigation, with repayment contingent upon recovery, the lawyer to whom the matter is disclosed had a duty to report the first lawyer's violation of the ethics rule. The information was not privileged since it had been furnished by the first lawyer, not by a client.

This inquiry adds the element that the client, the estate beneficiaries, have advised that they do not care to take further action against the first lawyer, since the first lawyer has agreed to make restitution. MCPR DR 4-101 obligates all lawyers to preserve "confidences" and "secrets" of the client. These terms are defined in DR 4-101(A) as follows:

    "'Confidence' refers to information protected by the attorney-client privilege under applicable law, and 'secret' refers to other information gained in the professional relationship that the client has requested be held inviolate or the disclosure of which would be embarrassing or would be likely to be detrimental to the client."

It is evident that MCPR Canon 4 makes a distinction between a "confidence" and a "secret" beyond mere technical considerations of secrecy in the evidentiary sense ("confidence") and other information gained in the professional relationship ("secret"). Most, but not all, information received by a lawyer from a client within the professional relationship is protected.

The ethics rules do not contemplate the possibility that client confidences and secrets may have to be revealed in order to satisfy the requirements of other Disciplinary Rules. MCPR DR 7-102(B)(1) requires a lawyer to reveal client fraud committed in the course of the lawyer's representation, and MCPR DR 4-101(C)(2) authorizes a lawyer to disclose client confidences or secrets when permitted "under Disciplinary Rules or required by law or court order."

Admissions made to a lawyer in the course of his or her representation of a client by persons other than the client or client's agent are not protected as privileged communications under applicable law. If the investigating lawyer were called as a witness and asked about the conduct of the attorney for the estate, the estate beneficiaries would have no standing to assert the privileged communication rule, since the investigating lawyer's testimony would not disclose any communication made to the lawyer by the clients, much less a privileged one. Therefore it is clear that the information concerning the first lawyer's wrongdoing is not a "confidence."

A "secret" is defined in part to include "other information gained in the professional relationship that the client has requested be held inviolate, or the disclosure of which . . . would be likely to be detrimental to the client." This "other information" received by the lawyer during the representation of the client necessarily refers to "unprivileged knowledge" or information relating to the client and client affairs. Since MCPR DR 4-101(A) clearly distinguishes between privileged information and unprivileged information, there is no basis to conclude that the term "unprivileged" in MCPR DR 1-103(A) was selected without regard to the limited meaning of that word which flows from the MCPR DR 4-101 definition of a "confidence." MCPR DR 1-103(A) clearly obligates a lawyer to disclose "unprivileged" knowledge of a violation of MCPR DR 1-102.

To rule that MCPR DR 1-103(A) prohibits disclosure of both "secrets" and "privileged information" would result in a professionally intolerable situation. Whenever a lawyer is caught misappropriating client funds, the offender could insulate himself or herself from disciplinary action by conditioning restitution upon agreement by the client and the client's new lawyer not to disclose the misconduct. The client would likely agree, since the client is primarily concerned with return of the money, and will have no particular interest in maintaining the integrity of the profession. The consequences of leaving an unscrupulous wrongdoer in the professional marketplace to perpetuate similar acts of misconduct upon other unsuspecting clients is unthinkable, even under circumstances where disclosure may be to the client's disadvantage or economic detriment.

When during the course of professional employment a lawyer learns of the ethical misconduct of another lawyer from persons other than the lawyer's client, the lawyer is required to disclose the wrongdoing. The client has no say in the matter; the lawyer has a mandatory obligation to divulge unprivileged knowledge of another lawyer's violation of the Disciplinary Rules.

 
     

 

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