CI-948

October 7, 1983

SYLLABUS

A lawyer shall report to a representative of the Grievance Commission any unprivileged knowledge that he or she has of another lawyer assisting his or her client in the perpetration of a fraud upon another person or a tribunal.

A lawyer may report a fraud of another person, not his or her client, to the proper authorities so long as the lawyer does not violate the ethical responsibility THE LAWYER HAS to his or her own client.

References: DR 1-103(A), DR 7-102; CI-759.

TEXT

In the course of a lawyer's work in defense of a defendant in a third party action, the lawyer has learned that the plaintiff defrauded the no fault carrier responsible for his personal injury protection benefits by representing to the carrier that he was unable to work when in reality he had been laid off his job as a result of a work slow-down and the carrier paid his wages in the amount of $12,000.00 in a six months period. You state that although you were never involved in the first party case, the lawyer representing the plaintiff in the third party case, which you are defending, is the same lawyer who assisted the plaintiff in securing his benefits from the defrauded carrier.

Under DR-103(A), 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. If plaintiff's lawyer in anyway knowingly assisted the client perpetrating the fraud on the no fault carrier, the lawyer would be violating DR 1-102 of the Code of Professional Responsibility. If you have knowledge of this, the Code of Professional Responsibility requires you to report this violation to the Attorney Grievance Commission so that an investigation can be made.

As to your responsibility to report the fraud of the plaintiff, the Code of Professional Responsibility, DR 7-102(B), provides that a lawyer, who receives information clearly establishing that a person, other than the client, has perpetrated a fraud upon tribunal, shall promptly reveal the fraud to the tribunal. The Code would require you to report a fraud of the client only upon a tribunal, or to a person against whom a fraud is committed by the client in a situation where the client refuses to rectify the same. Therefore, in the situation of a fraud committed by a person other the client, a lawyer would have a duty to report this only in a situation where the fraud has been committed upon a tribunal and then only to the tribunal. CI-392 emphasizes that the report should not be made when there is only a suspicion. This opinion emphasizes that a lawyer should not enter into any further negotiations with opposing counsel or the client until the tribunal has been notified of the fraud. CI-759 states that a lawyer may, but is not obligated, to report fraud of a non-client to the effected person provided the lawyer does not violate ethical responsibility to the lawyer's own client.