Under the Rules of Professional Conduct lawyers have duties to disclose certain matters (conflicts, adverse interests, etc.) and duties not to disclose confidential information. How should we understand these duties when certain facts are already known to the relevant persons?
Suppose that Sue R., an unrepresented person, says to you, “I know you’re a lawyer and you represent Simon. If Simon doesn’t pay me a lot of money by tomorrow, I’ll sue and cause a media firestorm.” Before you say, “How much are you demanding?” you recall that Rule 4.3(b) provides, “a lawyer shall clearly disclose [to an unrepresented person] that the client’s interests are adverse to the interests of the unrepresented person.” Must you disclose that Simon has adverse interests before communicating further with Sue?
In 2015, the OLPR director answered this question, “Note that the rule [4.3(b)] does not require such a disclosure in all instances. There may be times when the lawyer’s role and relationship to the unrepresented person is patently obvious.”1 In this analysis, even if Sue had not manifested knowledge of adverse interests, Rule 4.3(b) would not have required disclosure if the adversity was “patently obvious.” However, the current director takes an opposing view, “Importantly, the rule [4.3(b)] is framed as obligatory and the obligation is not only triggered when there may be a misunderstanding about the lawyer’s role—but rather is present whenever the interests are adverse.”2 Who’s right?
Before responding, let’s consider some other disclosure situations under the Rules, starting with the duty of confidentiality under Rule 1.6. Rule 1.6 uses “reveal” and “disclose” interchangeably. Rule 1.6(a) provides, with certain exceptions, that a lawyer shall not, “reveal information relating to the representation of a client.” ABA Formal Opinion 480 (2018) takes the categorical position “The duty of confidentiality extends generally to information related to a representation whatever its source and without regard to the fact that others may be aware of or have access to such knowledge.”
At a national meeting of ethics lawyers in 2018, a member of the ABA Standing Committee on Ethics and Professional Responsibility, citing Op. 480, stated that, without the client’s informed consent, under Rule 1.6 a lawyer may not reveal that she just learned that she and her client prevailed in a published 8th Circuit opinion. A lawyer in the audience responded, “You mean if there’s an announcement that I won Hadley v. Baxendale, I’m the only lawyer in the room who can’t talk about it?” The ABA committee member answered affirmatively. Who’s right, the lawyer in the audience or the ABA lawyer?3
A good place to start in rule interpretation is with definitions of the operative verbs. “Disclose” means “To make (something) known or public; to show (something) after a period of inaccessibility or of being unknown; to reveal.” BLACK’S LAW DICT. (11th Ed. 2019). One cannot, by definition, “disclose” or “reveal” that which the other party to the communication already knows.
Several provisions in the Rules indicate that a lawyer need not state what a person already knows. Thus, as to obtaining informed consent to a conflict of interest, “A lawyer need not inform a client or other person of facts or implications already known to the client or other person.” Rule 1.0 cmt. 6.4 Also, “if the client agrees to consent to a particular type of conflict with which the client is already familiar, then the consent ordinarily will be effective with regard to that type of conflict.” Rule 1.7 cmt. 22. And, Rule 1.8(a)(2) requires as to a lawyer entering into a business transaction with a client, “the client is advised in writing of the desirability of seeking … independent counsel … .” However, “If the client is independently represented in the transaction, paragraph (a)(2) of this rule is inapplicable, … .” Rule 1.8 cmt. 4.
A practical perspective leads to the same conclusion as does the dictionary. Sue will not be better informed or protected if the lawyer tells her, “I hereby disclose that your interests and the interests of my client are adverse.” Rule 4.3(b) does not require the lawyer to explain the nature of the adversity, but only to disclose – where that is possible – that the interests are adverse.
The principles of interpretation that govern application of the Rules and the practice of good lawyers also support the conclusion that disclosure is not required to someone who already knows the subject of purported disclosure. As matters of general principle, “The Rules of Professional Conduct are rules of reason. They should be interpreted with reference to the purposes of legal representation and of the law itself.” MRPC SCOPE . The MRPC use the word “reasonable” and its cognates hundreds of times. “Reasonable” conduct is defined by “the conduct of a reasonably prudent and competent lawyer.” Rule 1.0(i).
There are numerous situations in which prudent and competent lawyers commonly communicate with unrepresented persons, with adverse interests, without stating, “Your interests are adverse to those of my client.” Three examples illustrate the point that lawyers often do not attempt to make disclosures to those who already know.
First, when lawyers examine unrepresented witnesses in court or at deposition, they do not customarily give notice of adverse interests. A Lawyers Board Panel dismissed a charge that a lawyer violated Rule 4.3 by not advising a deponent of adverse interests.5 In addition, judges are required to take “appropriate action” when a lawyer violates the Rules, but judges do not customarily take any action when in court proceedings lawyers do not give notice of adverse interests to adverse witnesses. Minn. Code Jud. Conduct 2.15(D).
Second, in situations where there are adverse interests between buyer/seller, lender/borrower and the like, and only some of the parties are represented, it is not customary for lawyers to notify the unrepresented persons who are sophisticated in such transactions that they have adverse interests. The lawyers reasonably expect that these persons already know of adverse interests. When, for example, there are closings of complicated financial transactions, and several lenders are represented by non-lawyer business people, while the borrower and insurer are represented by lawyers, the lawyers do not customarily inform the business people that the lenders have adverse interests to the borrower and the insurer.
Third, in a civil case not involving the Rules, the Minnesota Supreme Court regarded as decisive that an unrepresented person would have known from the nature of the matter that his communications with a lawyer involved adverse interests. The Court held that a statement taken by a lawyer from an unrepresented person, Peper, with interests adverse to the lawyer’s client could have sufficient probative value to avoid a directed defense verdict.6 Peper was in an auto accident that was fatal to Litman. Litman’s widow sued Peper. The widow’s lawyer, accompanied by the widow’s relative, took a statement from Peper. Peper made damaging admissions. The Court recognized these admissions as potentially of great importance to a jury, because “they were made to a representative and to a relative of the widow, both of whom were investigating the accident and whose object could hardly have been mistaken.” Id. (emphasis added.) Litman antedated the Rules and Rule 4.3, but the point survives, that in certain circumstances an unrepresented person would understand that a lawyer represented a party with adverse interests.
My view is that a lawyer need not and indeed cannot disclose that which the party in question already knows. However, a few caveats are in order. There are some situations that are so laden with risk and with possibilities of misunderstanding, that a lawyer will best protect herself and her client by disclosing, or restating, basic facts and ground rules of the situation. For example, where an unrepresented person may suffer substantial disadvantage – and Rule 4.3 does not forbid a lawyer to take advantage of an unrepresented person – a lawyer should consider restating that the parties’ relationship is adversarial and the lawyer represents only one party. Where practicable, the lawyer should consider confirming the statement in writing. Finally, a lawyer who wishes to avoid controversy and possible discipline should heed the current OLPR view that Rule 4.3(b) requires a statement of adverse interests even where such adversity is already known.
William J. Wernz is the author of the online treatise, “Minnesota Legal Ethics.” He has been a member of the Board on Judicial Standards, and he has served as Dorsey & Whitney’s ethics partner and as director of the Office of Lawyers Professional Responsibility.