NYSBA Proposed Rules of Professional Conduct — Part IV | New York Legal Ethics Reporter

NYSBA Proposed Rules of Professional Conduct — Part IV

By Roy Simon

[Originally published in NYPRR April 2008]

Editor’s note: This is the fourth in a series of articles by Roy Simon describing and explaining the proposed New York Rules of Professional Conduct. The Rules have been approved by the New York State Bar Association’s House of Delegates and are now being reviewed by the Presiding Justices of the Appellate Divisions.

Proposed Rules Governing Confidentiality (Rules 1.6, 1.9, 1.13, and 3.3)

Over the past few months, I have described some of the most interesting provisions from the proposed New York Rules of Professional Conduct, which are now pending before the Appellate Divisions. This month I describe the most controversial and perhaps the most important proposed rules, the rules governing confidentiality. Lawyers familiar with New York’s existing rules will find much that is familiar in the proposed rules, together with some new duties.

Rule 1.6: The Basic Duty of Confidentiality

Proposed Rule 1.6 governs a lawyer’s duty of confidentiality to clients. The rule largely carries forward the language of existing DR 4-101 but clarifies the scope of protected information and adds certain new exceptions that accord with widespread practices and customs in the legal profession.

Rule 1.6(a) begins with a prohibition essentially parallel to DR 4-101(B), commanding lawyers not to “reveal confidential information … or use such information to the disadvantage of a client or for the advantage of the lawyer or a third person” unless certain conditions are satisfied. Rule 1.6(a) differs from DR 4-101, however, by permitting a lawyer to reveal confidential information when “impliedly authorized.” That exception accords with existing practice even though it is not expressly articulated in the text of DR 4-101(C). Under DR 4-101(A), “secrets” are defined as 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.” By implication, DR 4-101 already authorizes a lawyer to reveal confidential information whenever the client has not instructed the lawyer to keep the information inviolate and disclosure would neither embarrass nor harm the client. That is essentially the scope of the “impliedly authorized” exception in Rule 1.6(a). Stated differently, a lawyer will still be bound under Rule 1.6(a) not to reveal confidential information that the client has instructed the lawyer to hold inviolate (to revert to the language of DR 4-101). Implied authority to reveal takes effect only if the revelation would advance the client’s interests and the client has not expressly instructed the lawyer to keep the information secret.

Rule 1.6(a) also redefines confidential information. It abandons DR 4-101(A)’s confusing dichotomy between “confidences” and “secrets,” instead using the unified term “confidential information.” Rule 1.6(a) then defines “confidential information” to include information “gained during or relating to the representation of a client, whatever its source,” that is “(a) protected by the attorney-client privilege, (b) likely to be embarrassing or detrimental to the client if disclosed, or (c) information that the client has requested be kept confidential.” These three enumerated categories are substantially similar to the categories in DR 4-101(A). However, Rule 1.6(a) also does something that DR 4-101 does not — it makes clear that certain information is presumptively not confidential. Specifically, Rule 1.6(a) provides that confidential information does not ordinarily include “(i) a lawyer’s legal knowledge or legal research or (ii) information that is generally known in the local community or in the trade, field or profession to which the information relates.” These two exclusions reflect prevailing customs, common understandings, and pragmatic considerations in the legal profession.

For example, if a lawyer finds a case or statute while researching a matter for Client A, nobody believes that Client A can instruct the lawyer not to use the case or statute on behalf of another client in an unrelated matter. Legal research and knowledge are simply not protected by the confidentiality rules, and should not be. Nor do most lawyers believe they have an obligation to protect information that is already “generally known,” a term that means far more than simply available in public records. Thus, if a lawyer learns the customs and trade usage of the tire industry while defending a breach of contract claim against Client X, the lawyer may ethically use the same information to defend against a breach of contract claim against Client Y even if Client X requests that the lawyer keep the information about custom and trade usage confidential. These customs are justified, and the rules should reflect them. Existing DR 4-101 does not. Proposed Rule 1.6(a) does.

Rule 1.6(b) preserves four of the five exceptions to confidentiality in DR 4-101(C) and adds two new exceptions. (The fifth exception in DR 4-101(C), the client’s informed consent, is also preserved but appears in Rule 1.6(a).) As in DR 4-101(C), all of the exceptions in Rule 1.6(b) are discretionary rather 2008 than mandatory — they provide that a lawyer “may” (not “must”) “reveal or use confidential information to the extent that the lawyer reasonably believes necessary.” However, the lead-in language to Rule 1.6(b) differs from the lead-in language to DR 4-101(C) in two ways.

First, DR 4-101(C) says that a lawyer may “reveal” confidential information but does not expressly say — as Rule 1.6(b) does — that a lawyer may also “use” information that fits within an exception. Rule 1.6(b) thus recognizes that if a lawyer is permitted to “reveal” information to others who have no duty of confidentiality, then the lawyer should logically also be permitted to “use” the information in ways that are less damaging to the client than revealing it. For example, since a lawyer may reveal to the police, “My client Lee Jones intends to break in to Tiffany’s tonight,” then the lawyer should instead be able to use the same information without revealing the client’s name or specific intent. That is, the lawyer should be permitted to tell the police, “Keep an eye on Tiffany’s tonight,” which prevents the crime by using the confidential information without actually revealing that information. Use without revelation gives better protection to the client, because if the client later changes his mind (perhaps because he ultimately heeds the lawyer’s advice not to commit the crime), the police will not know the client’s name or specific intentions.

Second, all of the exceptions in Rule 1.6(b) permit a lawyer to use or reveal confidential information only “to the extent the lawyer reasonably believes necessary.” In contrast, DR 4-101(C) contains the limiting word “necessary” only in the text of the exceptions for the intention of a client to commit a crime and for collecting a fee or defending against an accusation of wrongful conduct, leaving the impression that a lawyer may reveal as much information as she wishes (not just what is “necessary”) when permitted under the Disciplinary Rules or court order. See, DR4-101(C)(2). By expressly imposing the “necessary” limitation on all exceptions to the duty of confidentiality, Rule 1.6(b) provides greater guidance to lawyers, and extends greater protection to clients, than DR 4-101(C).

Rule 1.6(b)(1) permits a lawyer to use or reveal confidential information necessary to “prevent reasonably certain death or substantial bodily harm.” This exception has no counterpart in the existing Disciplinary Rules. It recognizes that protecting human life is a paramount value that justifies an exception to the duty of confidentiality, whether the threat of death or substantial physical harm comes from the lawyer’s client or from a third party, and whether the conduct that threatens death or injury is criminal or not. If a lawyer in the course of representing a client gains information indicating that people are reasonably certain to die or suffer injury, the lawyer should at least have the right to disclose the information to prevent the harm no matter who is at fault and whether or not the fault is criminal. For example, if a lawyer learns in confidence from a client’s structural engineer that a building (whether the client’s own building or someone else’s building) is dangerously unstable and is reasonably certain to collapse onto a busy sidewalk, the lawyer should be permitted to reveal confidential information to the extent necessary to prevent injury and death even if the client is not the responsible party and even if the cause of the building collapse would constitute negligence or recklessness but not a crime. A client should not have a veto over a lawyer’s right to disclose confidential information necessary to save a human life, and the rules governing confidentiality should not prohibit a lawyer from disclosing confidential information needed to save a human life. Rule 1.6(b)(1) recognizes this. Existing DR 4-101(C) does not.

Rule 1.6(b)(2) permits a lawyer to reveal confidential information necessary “to prevent the client from committing a crime.” This is substantially similar to DR 4-101(C)(3), which permits a lawyer to reveal “the intention of a client to commit a crime and the information necessary to prevent the crime.”

Rule 1.6(b)(3) is substantially identical to DR 4-101(C)(5), which permits a lawyer to withdraw an opinion or representation that the lawyer previously gave and that the lawyer reasonably believes is still to be relied upon by a third person, where the lawyer has discovered that the opinion or representation was based on materially inaccurate information or is being used to further a crime or fraud.

Rule 1.6(b)(4) permits a lawyer to reveal confidential information in order “to secure legal advice about compliance with these Rules or other law by the lawyer, another lawyer associated with the lawyer’s firm or the law firm.” This exception has no counterpart in the existing Disciplinary Rules but reflects established custom and is supported by strong policies. Lawyers have for many decades consulted bar association ethics committees regarding ethics questions, and lawyers routinely consult other lawyers (either inside or outside their law firms) for advice on ethics matters. Sometimes, obtaining client consent to consult with another lawyer is practical, but often it is not (for example, where the inquiring lawyer needs advice on responding to a client’s possible fraud, or on whether the lawyer must disclose a conflict of interest to a client). The ethics rules should make it easy for lawyers to obtain advice regarding their options and obligations under the law and the ethics rules. Permitting lawyers to consult lawyers outside their own firms will help to achieve that objective — and because a consultation with another lawyer for the purpose of seeking advice is itself privileged, the exception poses no threat to a client’s confidential information. Rule 1.6(b)(4) reflects this policy and custom. Existing DR 4-101(C) does not.

Rule 1.6(b)(5) is substantially similar to DR 4-101(C)(4) but separates the fee collection and self-defense exceptions in that rule into two separate subparagraphs, and narrows the self-defense exception to give greater protection to clients.

Rule 1.6(b)(5)(i), like DR 4-101(C)(4), permits a lawyer to use or reveal confidential information “to defend the lawyer or the lawyer’s employees and associates against an accusation of wrongful conduct” by any person, but under Rule 1.6(b)(5)(i) the exception applies only when the accusation is “concerning the lawyer’s representation of the client” and is “made in a proceeding that has been brought or that the lawyer reasonably believes will be brought.” Narrowing the self-defense exception reflects a policy of protecting the client’s confidential information despite the lawyer’s discomfort, unless the lawyer is under attack in a formal proceeding or reasonably expects to become the target of an attack in a formal proceeding. An accusation against the lawyer in the press or in an informal setting should not be sufficient to destroy the client’s right to confidentiality.

Rule 1.6(b)(5)(ii), which permits a lawyer to use or reveal confidential information “to establish or collect a fee,” is substantially identical to DR 4-101(C)(4).

Rule 1.6(b)(6) is substantially similar to DR 4-101(C)(2) but uses the phrase “to comply with other law or court order” rather than “required by law or court order.” The intended meaning is the same.

Rule 1.6(c) is essentially identical to DR 4-101(D).

Proposed Rule 1.9(c): Confidentiality Duties to Former Clients

Rule 1.9(c) is similar to DR 5-108(A)(2), regarding confidentiality obligations to former clients, but differs from it in two ways:

First, Rule 1.9(c) not only forbids a lawyer to “use” confidential information absent an exception to the confidentiality rule (Rule 1.6) but also forbids a lawyer to “reveal” it. Existing DR 5-108(A)(2) does not expressly prohibit a lawyer from revealing confidential information regarding former clients, but DR 4-101(B)(1) does expressly prohibit a lawyer from revealing confidential information regarding current clients. Logically, the protection against revealing confidential information should extend to former clients as well. Rule 1.9(c) does so.

Second, Rule 1.9(c)(2) prohibits a lawyer from using a former client’s confidential information only if such use would be “to the disadvantage of the former client” (unless other rules would permit or require the lawyer to use the information regarding a current client or the information has become “generally known”). Permitting a lawyer to “use” a former client’s confidential information unless using the information would disadvantage the former client is consistent with the expectations of most former clients, and enables lawyers to work more efficiently and less expensively on behalf of current clients because they do not have to reinvent the wheel. As a practical matter, this change will make little difference because information that would not be likely to harm or embarrass a former client is generally not a “confidence” or “secret.” The change permits a lawyer to use confidential information of a former client for the benefit of an existing client when the former client would suffer no harm.

Proposed Rule 1.13: Organization as Client

Proposed Rule 1.13 explains a lawyer’s responsibilities when representing a corporation or other organization. It generally parallels existing DR 5-109. Regarding confidentiality, Rule 1.13(b) governs a lawyer’s options and obligations upon learning of wrongdoing within the represented organization. The rule begins with language taken from the first sentence of DR 5-109(B) (“If a lawyer for an organization knows that an officer, employee or other person associated with the organization is engaged in action or intends to act or refuses to act in a matter related to the representation …”), but the rest of DR 5-109(B) is replaced by a single sentence providing that a lawyer “shall refer the matter to higher authority in the organization, including, if warranted by the circumstances, to the highest authority that can act on behalf of the organization” (typically the board of directors or its equivalent), unless the lawyer “reasonably believes that it is not necessary in the best interest of the organization to do so …” The “shall” formulation in Rule 1.13(b) thus resolves an ambiguity in DR 5-109(B), which uses the word “may” (rather than “shall”) and therefore appears to make referral to higher authority optional even when referral to higher authority is necessary to serve the best interests of the organization in the circumstances.

Because a lawyer for an organization owes a duty of loyalty to the organization rather than to its individual constituents, and because ultimate authority over the affairs of the organization rests with the highest authority that can act on behalf of the organization, a lawyer who knows of wrongdoing or intended wrongdoing by an organization’s constituents should be required to inform the highest authority in the organization (the brain of the organization) unless the referral would be contrary to the organization’s best interests.

Rule 1.13(c) provides that if a lawyer is unable to remedy the wrongdoing by referring the matter to higher authority within the organization as mandated by Rule 1.13(b), the lawyer has two options: (1) the lawyer “may reveal confidential information if permitted by Rule 1.6” (the confidentiality rule), and (2) the lawyer “may resign in accordance with Rule 1.16” (the withdrawal rule). This formulation essentially follows existing DR 5-109(C) but makes clear that an exception to the duty of confidentiality may permit disclosure outside the organization even if the lawyer resigns or intends to resign. Significantly, COSAC rejected ABA Model Rule 1.13(c), which permits a lawyer to reveal confidential information outside the corporation in certain circumstances. The proposed New York rule does not expand the existing exceptions to the duty of confidentiality, but simply reminds lawyers that the existing exceptions may apply. The most likely exceptions to Rule 1.6 would be the intention of a client to commit a crime (such as a major corporate fraud), or to cause reasonably certain death or substantial bodily harm (such as a toxic spill or tainted product that has not previously been reported to authorities).

Proposed Rule 3.3: Candor Toward the Tribunal

Rule 3.3 requires a lawyer to be candid when representing a client before a tribunal. It addresses issues currently addressed in DRs 7-102 and 7-106.

Rule 3.3(a)(3) provides that a lawyer shall not offer evidence that the lawyer “knows to be false.” This is similar to DR 7-102(A)(4), which prohibits a lawyer from knowingly using “perjured testimony or false evidence.” (Since perjured testimony is by definition false, the proposed rule deletes the separate reference to “perjured” testimony.) Regarding confidentiality, Rule 3.3(a)(3) further provides that if a lawyer, the lawyer’s client, or a witness called by the lawyer has offered material evidence and the lawyer “comes to know of its falsity,” the lawyer “shall take reasonable remedial measures, including, if necessary, disclosure to the tribunal.” The mandate to disclose false testimony by a witness other than the client is consistent with DR 7-102(B)(2), which provides that a lawyer who receives information clearly establishing that a person other than the client has perpetrated a fraud upon a tribunal “shall reveal the fraud to the tribunal.”

The mandate in Rule 3.3(a)(3) to disclose past false testimony by a client arguably goes beyond DR 7-102(B)(1), which excuses a lawyer from revealing a client’s past fraud on the tribunal if the information “is protected as a confidence or secret.” However, proposed Rule 3.3(a)(3) is consistent with the letter and spirit of recent decisions of the New York Court of Appeals, including People v. Andrades, 4 N.Y.3d 355 (2005) (referring to “counsel’s obligation to reveal fraud perpetrated by a client upon the court”), People v. Barroa, 99 N.Y.2d 134 (2002) (noting that “counsel has a duty to disclose witness perjury to the Court”), and People v. DePallo, 96 N.Y.2d 437 (2001) (holding that counsel complied with DR 7-102(B)(1) by advising the court after his client testified that his client had testified falsely). I have also heard judges say at CLE programs that they would expect lawyers to inform the court if a client has testified falsely. Yet existing DR 7-102(B)(1) arguably prohibits a lawyer from doing so.

Rule 3.3(a)(3) is justified not only by case law and judicial expectations but also on policy grounds. A client who intends to lie has no expectation of confidentiality because Rule 1.6(b)(2) — like DR 4-101(C)(3) — permits a lawyer to reveal confidential information “to prevent the client from committing a crime.” As a policy matter, a client who has already lied should have no right to greater protection, because even a criminal defendant has no constitutional right to testify falsely. See Nix v. Whiteside, 475 U.S. 157, 163 (1986) (“a criminal defendant’s privilege to testify in his own behalf does not include a right to commit perjury”). By making clear that a lawyer’s duty of candor to the court trumps a lawyer’s duty of confidentiality to a client with respect to perjured testimony, Rule 3.3(a)(3) provides clear guidance to lawyers, protects the integrity of our system of justice, and gives lawyers greater ability to persuade clients not to commit perjury in the first place.

Rule 3.3(b) requires a lawyer who represents a client in an adjudicative proceeding to take “reasonable remedial measures, including, if necessary, disclosure to the tribunal,” if the lawyer knows that any person — including a client — intends to engage, is engaging, or has engaged in any of four categories of wrongdoing: “(i) bribing, intimidating or unlawfully communicating with a witness, juror, court official or other participant in the proceeding; (ii) unlawfully destroying or concealing documents related to the proceeding; (iii) failing to disclose information to the tribunal when required by law to do so, or (iv) other criminal or fraudulent conduct related to the proceeding.” This rule goes substantially further than DR 7-102(B)(2), which applies only when a person “other than” the client has “perpetrated a fraud upon a tribunal.” The broad duty to disclose serious wrongful conduct related to a proceeding should deter corruption in our system of justice and help courts to detect it when it does occur.

Rule 3.3(c) provides that the mandatory disclosure duties imposed by Rules 3.3(a) and (b) “continue to the conclusion of the proceeding” and apply even if compliance requires disclosure “of confidential information.” This provision gives lawyers greater power to correct fraud on a tribunal than DR 4-101, which authorizes (but does not require) disclosure of a client’s intended (future) crime but not a client’s past crime, and DR 7-102(B), which requires a lawyer to disclose past fraud on the tribunal by a person “other than a client” but appears to exempt a lawyer from disclosing past fraud by a client if the information is protected as a confidence or secret. Rule 3.3(c) clears up any ambiguity with respect to clients, making it clear that a lawyer must disclose a client’s criminal or fraudulent wrongdoing in connection with an adjudicative proceeding.

Rule 3.3(d), which has no equivalent in the current Disciplinary Rules, provides that a lawyer in an ex parte proceeding must inform the tribunal of “all material facts known to the lawyer” — whether or not the facts are adverse — that will enable the tribunal to make an informed decision. This rule will ensure fairness in TRO proceedings and other ex parte proceedings.

Conclusion: Evolutionary, Not Revolutionary

The proposed New York Rules of Professional Conduct relating to confidentiality are evolutionary, not revolutionary. They are either consistent with their counterparts in the existing New York Disciplinary Rules or reflect strong policies and sound customs and practices in the legal profession. The proposed rules thus avoid painful ruptures with current practice that might occur if New York adopted the ABA Model Rule provisions on confidentiality wholesale. Instead, the proposed rules clarify and codify many points that are difficult to divine from the current Code, and they make clear that the integrity of the judicial process requires a lawyer to reveal a client’s false testimony if no other action will remedy the problem. If the courts adopt the proposed rules, I predict that lawyers will adapt to them easily and will find that the new rules provide clearer and better guidance than the existing Code.

Roy Simon is the Howard Lichtenstein Distinguished Professor of Legal Ethics at Hofstra University School of Law. He is the Chief Reporter and Vice-Chair of the New York State Bar Association’s Committee on Standards of Attorney Conduct (“COSAC”), but the views expressed here are solely his own.

DISCLAIMER: This article provides general coverage of its subject area and is presented to the reader for informational purposes only with the understanding that the laws governing legal ethics and professional responsibility are always changing. The information in this article is not a substitute for legal advice and may not be suitable in a particular situation. Consult your attorney for legal advice. New York Legal Ethics Reporter provides this article with the understanding that neither New York Legal Ethics Reporter LLC, nor Frankfurt Kurnit Klein & Selz, nor Hofstra University, nor their representatives, nor any of the authors are engaged herein in rendering legal advice. New York Legal Ethics Reporter LLC, Frankfurt Kurnit Klein & Selz, Hofstra University, their representatives, and the authors shall not be liable for any damages resulting from any error, inaccuracy, or omission.

Roy Simon