ABA Considers Ethics of Client Secrecy

The American Bar Assn. is considering new ethics rules this week that would encourage lawyers to divulge client secrets to prevent fraud or violent crime.

The rules, proposed after four years of study, would bring the ABA in line with rules adopted by a number of states. But the proposal flies in the face of a California statute that generally prohibits such disclosures by attorneys.

Although state law would trump the association’s ethics policy, the issue nevertheless pits lawyers who believe the public has a right to know about a client’s fraud or plans to commit violent crime against those who believe that any breach of confidence could undermine the fundamental level of trust between attorneys and their clients.

On the one side are those, such as Los Angeles attorney David J. Pasternak, who maintain that a lawyer has a duty to exercise undivided loyalty on behalf of his or her client. He said that making it easier for a lawyer to reveal a confidence could turn the lawyer into an enforcer rather than an advisor.

“The role of a lawyer as a counselor and advocate is not consistent with serving as a law enforcement official or enforcing social norms,” Pasternak said.

On the other side are those, such as Boston University law professor Nancy J. Moore, who say the proposal reflects contemporary thinking that lawyers have “moral autonomy” that may transcend their relationship with a client.

“This is more in the public interest,” said Moore, who worked on the ABA’s Ethics 2000 Commission that drafted the proposals and is among the many legal ethics professors who favor the proposal.

As the nation’s leading lawyers group, with 400,000 members, the ABA’s position influences how lawyers respond when conflicts arise. However, the ABA’s rules are not binding on lawyers.

Similar proposals were defeated by association members in 1983 and 1991. But during the last 18 years a number of states have adopted broader disclosure rules. Some states, such as New Jersey, have even made disclosure of client confidences mandatory in certain circumstances, such as when a lawyer learns that his client plans to kill someone or commit fraud.

The proposed disclosure rules are among dozens of possible changes to the ABA’s Model Rules of Professional Conduct, which are scheduled to be taken up at the organization’s annual meeting here.

The proposed changes in the confidentiality of lawyer-client conversations have drawn the most attention and created a strong stir in California, which has the firmest rules in the nation prohibiting divulgence of client confidences, said Los Angeles Superior Court Judge Laurie Zelon, who served on the ABA commission.

U.S. Bankruptcy Judge Samuel Bufford, who heads a Los Angeles County Bar Assn. committee on the proposals, said the organization has introduced three amendments that would, in essence, block the proposed rules.

San Francisco attorney Sean M. SeLegue, who also opposes the new rules, said many of California’s delegates--who represent about 8% of the voters in the ABA House of Delegates--are lobbying against the measures.

SeLegue said he expects a heated floor debate when the proposals are considered Monday or Tuesday.

The confidentiality proposals would change the ABA rules in four principal respects.

Under the current ABA rule, a lawyer is not supposed to reveal information acquired about a client unless the client consents, except in two instances:

* To prevent a client from committing a criminal act that the lawyer believes is likely to result in imminent death or substantial bodily harm.

* To establish a defense when the lawyer is sued by a third party or charged with a crime, or to establish a defense when a controversy arises between the lawyer and the client.

Under the pending proposal, an attorney could reveal information about a client without consulting the client when the attorney believes it is reasonably necessary:

* To prevent “reasonably certain death or bodily harm.”

* To prevent the client from committing a crime or fraud that is reasonably certain to result in substantial financial injury to another and the client is using the lawyer’s services.

* To mitigate or rectify an injury to the financial interest or property of another that resulted from the client’s commission of a crime or fraud, and the client used the lawyer’s services to further the wrongdoing.

* To obtain legal advice about what to do to comply with the ethics rules.

Moore said the proposals are an attempt “to bring the ABA in line” with states that already permit disclosure of secrets in these circumstances. She said 41 states have rules that do not require that death or serious bodily harm be “imminent.”

In a written commentary accompanying the proposals, Moore said the elimination of the imminence requirement “recognizes the overriding value of life and physical integrity.”

She said the harm at issue is “reasonably certain to occur” if it “will be suffered imminently or if there is a present and substantial threat that a person will suffer such harm at a later date if the lawyer fails to take action necessary to eliminate the threat.”

Consequently, Moore explained, “a lawyer who knows that a client has accidentally discharged toxic waste into a town’s water supply may reveal that information to the authorities if there is a present and substantial risk that a person who drinks the water will contract a life-threatening or debilitating disease and the lawyer’s disclosure is necessary to eliminate the threat or reduce the number of victims.”

That may be a laudable goal, said Pasternak, but he and other members of the Los Angeles County Bar object to the elimination of the “imminence” requirement.

“Otherwise, when a client’s past or future conduct is likely to cause death or serious bodily harm in the future--such as through toxic waste--there are other means to address that issue,” Pasternak said.

“The polluter’s conduct might become known in other ways, such as if one of the polluter’s employees chooses to reveal the polluter’s conduct. If lawyers are permitted to disclose information about toxic pollution that they receive in confidence, then polluters will simply stop seeking legal advice on that topic.”

Some California attorneys say the ABA proposal flies in the face of a state statute that says it is the duty of an attorney “to maintain inviolate [client confidences] and at every peril to himself or herself to preserve the secrets of his or her client.”

Judge Bufford said there are acknowledged exceptions to the rule that, for example, would permit a lawyer to reveal a client’s imminent plan to murder someone. But the exceptions currently are quite narrow.

The ABA proposals making it easier for a lawyer to disclose fraudulent conduct by a client are even more controversial.

Lawrence J. Fox, managing partner of a large Philadelphia law firm, said that “99 times out of a 100” when lawyers discover that a client has committed an illegal act or is about to, the attorneys are able to persuade their clients to not break the law.

On the other hand, if the ABA proposal goes into effect, it “will infect the lawyer-client relationship with a sense of distrust,” Fox said. “Lawyers should not be acting as policemen for their clients.”

Fox also expressed concern that if the new rule goes into effect it could subject lawyers to liability for failing to become whistle-blowers.

But Robert E. O’Malley, a veteran Washington lawyer, sharply disagreed.

The proposed rule changes “will give the lawyer the ability to do the right thing and straighten it out quietly,” said O’Malley, who worked for the Attorney’s Liability Assurance Society, which provides malpractice insurance for large law firms around the country.

He said that has been the pattern in the states that already have rules like the ones the ABA is considering. O’Malley said lawyers in those states have used the threat of disclosure to get clients to act properly.

Lucian T. Perra, a Memphis attorney who also served on the ABA commission, said the debate on the issues will be “a gut check for members of the House of Delegates.”

New York University law professor Stephen Gillers deplored the status quo as something lawyers “should be embarrassed” about because the current rules permit attorneys to reveal a client confidence to defend themselves in a lawsuit or when seeking a fee from a client but not to prevent a fraud or even a death--simply because it is not about to occur imminently.

The ABA is not expected to take final action on the ethics revisions until its winter meeting in Philadelphia in January.