Issue: December, 2006
Author: John M. Burman
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Ethically Speaking - The Disclosure of Confidential Information Under the New Wyoming Rules of Professional Conduct
The August “Ethically Speaking” column ended by stating that “[a] number of exceptions exist regarding the ethical duty of confidentiality. They will be discussed in the next issue of the Wyoming Lawyer. That didn’t happen. Now it will.
Rule 1.6(a) allows an attorney to disclose “confidential information” (“Confidential information” is “information provided by the client or relating to the client which is not otherwise available to the public.”) in three circumstances: (1) “the client makes an informed decision to allow disclosure;” (2) disclosure is “impliedly authorized in order to carry out the representation;” or (3) disclosure is permitted by paragraph (b). The first exception, disclosure after the client makes an informed decision, is simply a restatement that clients are to receive, and lawyers are to give them, enough information so that the client can make an informed decision about the matter.
The second exception, disclosure is permitted when “impliedly authorized,” is a bit more difficult to apply. The general standard is that lawyer “is impliedly authorized to make disclosures about a client when appropriate in carrying out the representation.” This is not particularly helpful, but the commentary gives some examples. An attorney “may,” for example, “be impliedly authorized to admit a fact that cannot properly be disputed or to make a disclosure that facilitates a satisfactory conclusion to a matter.” When in doubt about whether disclosure is impliedly authorized, the answer is simple. Ask the client to make an informed decision to allow the disclosure.
Paragraph (b) permits the disclosure of confidential information in four situations. First, when the attorney “reasonably believes” that disclosure is “necessary” to “prevent the client from committing a criminal act.” Second, when an attorney is uncertain about his or her ethical obligations, he or she may disclose confidential information “to secure legal advice about the lawyer's compliance with [the] Rules.” Third, a lawyer may disclose such information when necessary to defend against a claim brought by a client or pursue a claim against a client or a former client. Finally, a lawyer may reveal confidential information “to comply with other law or a court order.” Disclosure is generally permissive, though it is mandatory at times. When disclosure is permissive, “[a] lawyer’s decision not to disclose . . . does not violate this Rule.”
Whenever confidential information is disclosed, the disclosure must be limited to the information the “lawyer reasonably believes . . . necessary to accomplish one of the purposes specified.” Before disclosing confidential information, a lawyer has another important ethical obligation.
One of the permitted bases for disclosing confidential information is that the client has made an informed decision to allow such disclosure. Accordingly, before a lawyer unilaterally decides to disclose information pursuant to one of the exceptions, the lawyer has an obligation to inform the client of the client’s options–the client may (1) agree to change his or her intended conduct so that disclosure is not necessary, (2) agree to the lawyer’s disclosure; or (3) not agree to such disclosure, knowing that the lawyer may disclose anyway. In particular, if the client intends to commit a criminal act, “the lawyer should first seek to persuade the client to take suitable action to obviate the need for disclosure.”
The reason for consulting with the client before disclosure is that the client is entitled to enough information to make an informed decision about how to proceed. Knowing that a lawyer will disclose information unless the client alters his or her conduct or consents to disclosure will likely alter the client’s behavior.
Lawyers in a firm are generally permitted to disclose confidential information to each other. The only exception is when “the client has instructed that particular information be confined to specified lawyers.”
Although Rule 1.6 and its commentary do not expressly refer to support staff and permit the disclosure of confidential information to such persons, the general structure and purpose of the Rules supports the proposition that lawyers may disclose confidential information to their staffs.
The lawyers in charge of a law office, whether private, corporate, or government, have a duty to “make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that [support staff members’] conduct is compatible with the professional obligations of the lawyer.” Managing attorneys are directed to provide training and supervision “particularly regarding the obligation not to disclose information relating to representation of the client.” The only reason to train and supervise non-lawyers about the obligation of confidentiality is that they will have access to such information. It seems clear, therefore, that attorneys may disclose confidential information to support staff members, unless the client directs otherwise.
Disclosure of Confidential Information to Prevent a Client from Committing a Crime
Wyoming attorneys have broad discretion to reveal confidential information. A lawyer “may reveal such information to the extent the lawyer reasonably believes necessary . . . to prevent the client from committing a criminal act.” The exception has three important concepts.
First, the “duty” is discretionary. The rule “permits,” but does not require, disclosure. Since the rule is permissive, “[a] lawyer’s decision not to disclose does not violate this Rule [1.6]. Disclosure may be required, however, by other Rules.” It is important to remember that while a lawyer generally has no ethical duty to disclose such information, he or she may have a legal one.
Second, before revealing information, the lawyer must “reasonably believe” disclosure is necessary. “Reasonably believes” is a defined term. It means “that the lawyer believes the matter in question and that the circumstances are such that the belief is reasonable.” The definition incorporates both subjective and objective elements.
The subjective aspect comes from the definition of “believes.” It means a lawyer “actually supposed the fact in question to be true. A person's belief may be inferred from circumstances.” The “actually supposed” language means the lawyer subjectively believes the matter in question. The last sentence, that “belief may be inferred from circumstances,” puts an objective gloss on the definition. Simply stated, a lawyer may not close his or her eyes to the obvious and then claim ignorance.
The objective aspect derives from the definition of “reasonably.” Using that term incorporates the proverbial reasonable lawyer standard. “[R]easonably’ when used in relation to conduct by a lawyer denotes the conduct of a reasonably prudent and competent lawyer.”
When read in light of the applicable definitions, “reasonably believes” means that a lawyer actually believes something (or it is obvious) and that the belief is a reasonable one. If the reasonable belief is that it is “necessary” to disclose confidential information to prevent the client from committing a crime, such disclosure is ethically permissible, though not ethically required. The word “ethically” is used twice in the previous sentence to emphasize that the lack of an ethical duty does not mean that the lawyer does not have a legal duty to disclose. Whether a lawyer has a legal duty is an issue unto itself, which will be discussed more fully in a later column. In a nutshell, a lawyer does, in certain circumstances, have a tort duty to disclose confidential information to prevent the client from committing certain criminal acts.
The third aspect of the exception is the phrase “criminal act.” The term is a very broad one. Criminal acts range from traffic offenses to white collar crime to serious bodily harm or death. One might think the term is overbroad, thereby allowing too much disclosure. That has not been a problem.
The “criminal act” language has been in effect since 1986, when the first version of the Rules of Professional Conduct was adopted in Wyoming. Disclosures have occurred, but they have been limited to situations where a reasonable lawyer would reveal information. As the standard has worked well for twenty years, change seems unnecessary.
Although disclosure pursuant to Rule 1.6(b)(1) to prevent a client from committing a criminal act is permissive, another provision of the Rules, Rule 4.1(a), mandates disclosure in some circumstances. Rule 4.1 is entitled “Truthfulness in statements to others.” It regulates both active and passive misrepresentations. Part (b), which is directed at passive misrepresentations, creates a limited duty to disclose.
Paragraph (b) of Rule 4.1 is restricted to a lawyer’s behavior “[i]n the course of representing a client.” While doing so, “a lawyer shall not knowingly fail to disclose a material fact to a third person when disclosure is necessary to avoid assisting a criminal or fraudulent act by a client, unless disclosure is prohibited by Rule 1.6.” Making the disclosure obligation subject to Rule 1.6, which codifies a lawyer’s ethical duty of confidentiality to a client, creates a massive loophole. Rule 1.6 protects all confidential information “relating to representation,” regardless of how the lawyer learned the information. As a result, most things a lawyer knows about a client or the representation of that client will be confidential, and Rule 1.6(a) prohibits the lawyer from revealing it.
When read together, however, Rules 4.1(b) and 1.6(b) create a limited duty to disclose confidential information. Paragraph (b) of Rule 1.6 creates exceptions to the duty of confidentiality and permits disclosure in certain circumstances, and Rule 4.1(b) requires disclosure unless disclosure is prohibited by Rule 1.6.”
Rule 1.6(b) permits the disclosure of otherwise confidential information in limited circumstances. Most importantly, Rule 1.6(b)(1) permits a lawyer to disclose information when he or she “reasonably believes [disclosure is] necessary . . . to prevent the client from committing a criminal act.” Since Rule 1.6(b)(1) permits disclosure to prevent a client from committing a criminal act, though not a fraudulent act, and Rule 4.1(b) requires disclosure to a third person to “avoid assisting” (whether knowing of a client’s intent is “assisting” is unclear) a client commit a criminal or fraudulent act unless disclosure is prohibited by Rule 1.6, a lawyer has an obligation to disclose confidential information to “avoid assisting” a client commit a criminal act. Accordingly, if the third person is the intended victim of a crime, a lawyer has an ethical duty to disclose the client’s intended crime.
Lawyers who have, currently do, or intend to practice in other jurisdictions need to be aware that rule 1.6 varies widely. They should assume that the rule is different in different jurisdictions.
The ABA Model Rules take the position that a lawyer may reveal confidential information only “to prevent reasonably certain death or substantial bodily harm.” Approximately 18 jurisdictions have adopted a similar standard. Another 22, including Wyoming, permit disclosure to prevent a crime. Eleven jurisdictions require disclosure to prevent substantial bodily harm or death.
Disclosure of Confidential Information to Obtain Advice about an Attorney’s Ethical Obligations
Rule 1.6(b)(2) allows disclosure of confidential information when a lawyer reasonably believes such disclosure is necessary “to secure legal advice about the lawyer's compliance with these Rules [of Professional Conduct].” This provision is new and reflects what was already occurring. Allowing disclosure under such circumstances will not harm clients, as the lawyer to whom the disclosure is made will be under the same duty of confidentiality as the lawyer making the disclosure.
Disclosure of Confidential Information in a Controversy with a Client or Former Client
Rule 1.6(b)(3) is the lawyer self-defense exception. It permits the disclosure of confidential information when a lawyer reasonably believes disclosure is necessary to establish a claim or defense on behalf of the lawyer in a controversy between the lawyer and the client, to establish a defense to a criminal charge or civil claim against the lawyer based upon conduct in which the client was involved, or to respond to allegations in any proceeding concerning the lawyer's representation of the client. The commentary makes it clear that the same exception applies to confidential information about former clients, with whom disputes are more likely.
This exception allows a lawyer to respond to claims in a “civil, criminal, disciplinary or other proceeding” by disclosing confidential information “to the extent the lawyer reasonably believes necessary to establish a defense.” The lawyer’s right to respond “does not require the lawyer to await the commencement of an action or proceeding that charges such complicity, so that the defense may be established by responding directly to a third party who has made such an assertion.”
Disclosure of Confidential Information to Comply with Law or Court Order
Rule 1.6(b)(4) makes it ethical for a lawyer to disclose confidential information “to comply with other law or a court order.” Whether disclosure is required “is a question of law beyond the scope” of the Rules. Before disclosing such information, a lawyer “must discuss the matter with the client” so that the client can make an informed decision about whether to authorize disclosure. After doing so, the lawyer may disclose the information, even if the client does not agree, “to comply with the law.” The commentary to the Rule mentions the Wyoming statutes which require reports about child abuse and abuse of vulnerable adults. Other laws may also apply.
One law that has given rise to substantial litigation is a provision of the Internal Revenue Code which requires the reporting of cash transactions that exceed $10,000.00. The issue which arises is that a lawyer who complies with the law, and identifies his or her client, may be subjecting the client to criminal penalties. By not disclosing, the attorney may be subjecting him or herself to criminal charges. And while disclosure is, arguably, ethically permissible, it is not required. Furthermore, one can also take the position that as an agent and a fiduciary for a client, an attorney cannot act contrary to the client’s interests.
In U.S. v. Monnat a federal district court in Kansas considered whether an attorney is ethically permitted to reveal a client’s name to the Internal Revenue Service. “It is clear,” said the court, “that if and when a client consults with an attorney, retaining him for whatever purpose, the canons [the rules of professional conduct] mandate that the client's very identity must be preserved.” The court went on to find a clear conflict between the ethical duty and the legal duty imposed by the Internal Revenue Code. The court “suspended” the matter and referred it “to the Chairman of the Federal Court Committee on Attorney Conduct with a request for that committee to undertake a study of the issues . . . taking into account the court's comments noted herein.” If that occurred, there is no reported record of the study, and the ethical issue remains uncertain.
It is reasonably clear, however, that while a client’s identity is generally protected by Rule 1.6(a), the attorney-client privilege does not protect a lawyer from revealing a client’s identity to comply with the Internal Revenue Code or other federal law as the client’s identity is generally not covered by the privilege. Accordingly, an attorney may ethically not disclose a client’s identity, but may be required to do so by law or a court order. If that is the case, the ethical duty must yield. The question thus becomes what should a lawyer do?
“When disclosure of information . . . appears to be required by other law, the lawyer must discuss the matter with the client to the extent required by Rule 1.4.” Rule 1.4, of course, requires a lawyer to “explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation.” The “matter” to be explained is the lawyer’s legal duty to disclose the client’s identity. The reason for giving the explanation is to allow the client to decide how to proceed (the client cannot demand that the lawyer violate federal law by not revealing the information.)
Obtaining a court order requiring an attorney to reveal confidential information is a good resolution of the fairly common desire to tell a court when one wants, or needs, to withdraw from representing a client. Far too often, attorneys file pleadings that say why they want to withdraw. The problem is that the reasons for wanting to withdraw are usually confidential. One should not, therefore, simply file a motion setting forth those reasons, such as the lawyer having learned that an unwaivable conflict has arisen.
The problem is that a lawyer has an ethical obligation not to “withdraw from the representation of a client if . . . the representation will result in violation of the rules of professional conduct or other law.” That duty to withdraw, however, is subject to the approval of the court in which the lawyer has appeared.
The result of the two Rules is that a lawyer appears to be caught between the duty to preserve confidential information (under Rule 1.6(a)) and the duty to withdraw (under Rule 1.16(a)(1)). Fortunately, the rules provide a way out of the dilemma.
Comment  to Rule 1.16 tells lawyers how to proceed. It begins by noting that “[d]ifficulty may be encountered if withdrawal is based on the client's demand that the lawyer engage in unprofessional conduct [any violation of the rules will be unprofessional conduct]. The court may request an explanation for the withdrawal . . .” Since the information that would explain the reasons is often information which “the lawyer may be bound to keep confidential,” it may not be revealed. Instead, “[t]he lawyer's statement that professional considerations require termination of the representation ordinarily should be accepted as sufficient.” If the court is not satisfied with the statement about “professional considerations,” the attorney should advise the court that he or she may reveal more information only if ordered to do so by the court, and that the attorney would prefer to make the disclosure in camera. If the court then orders disclosure, the attorney may ethically comply with that order, after having made the proper objections:
Absent an informed decision of the client to do otherwise, the lawyer should assert on behalf of the client all nonfrivolous claims that the order is not authorized by other law or that the information sought is protected against disclosure by the attorney-client privilege or other applicable law . . .
An Attorney’s Obligation to Report Child Abuse
Every state requires child abuse to be reported. Who has such a duty varies, and it is important that a lawyer know the law in the jurisdiction where he or she practices.
In Wyoming, the duty to report child abuse is very broad:
Any person who knows or has reasonable cause to believe or suspect that a child has been abused or neglected or who observes any child being subjected to conditions or circumstances that would reasonably result in abuse or neglect, shall immediately report it to the child protective agency or local law enforcement agency or cause a report to be made.
The statute makes no exception for attorneys. Furthermore, as discussed above, the Rules permit an attorney to disclose confidential information “to comply with other law . . .” Whether the other law overrides a lawyer’s ethical duty of confidentiality “is a question of law beyond the scope of these Rules [of Professional Conduct].” In Wyoming, that question should be answered in the affirmative. The law overrides the ethical duty of confidentiality.
The Wyoming Supreme Court has carefully guarded its authority over lawyers. In particular, the court held that a statute which purported to authorize courts to sanction lawyers for filing baseless pleadings was “procedural, not . . . substantive;” accordingly, said the court, the “legislature is prohibited from enacting statutes pertaining to such matter.” The difference with respect to the child abuse reporting statute is that the court has adopted Rule 1.6(b)(4), which expressly authorizes the disclosure of confidential information to “comply with other law.” That express authorization seems to require lawyers to comply with the child abuse reporting law.
Although the statute requires all persons to report child abuse, they “are ‘permissive reporters,’ because they do not face a criminal penalty if they fail to report child abuse.” Rather than punish non-reporting, the statute seeks to encourage reporting by providing qualified immunity for reporters.
Any person who reports child abuse is immune from “any civil or criminal liability” so long as the report is made in “good faith,” and good faith “shall be presumed.” The Wyoming Supreme Court has interpreted the statute broadly, defining bad faith as the absence of good faith. “[T]he statute does not afford immunity for deliberately false accusations, yet still protects those who report in good faith.” Negligent reporting will not, therefore, lead to potential liability as negligence is not deliberate.
An Attorney’s Obligation to Report Abuse of a Vulnerable Adult
A similar reporting obligation exists regarding vulnerable adults:
Any person or agency who knows or has reasonable cause to believe that a vulnerable adult is being or has been abused, neglected, exploited or abandoned or is committing self neglect shall report the information immediately to a law enforcement agency or the department [of family services.]
It is very hard to argue that the duty does not apply to attorneys. The duty, according to the statute, “applies without exception.” It applies when a person “knows, or has sufficient knowledge which a prudent and cautious man in similar circumstances would have to believe, that a vulnerable adult has been or is being abused, neglected, exploited or abandoned, or is committing self neglect.”
A “vulnerable adult” is “any person eighteen (18) years of age or older who is unable to manage and take care of himself or his property without assistance as a result of advanced age or physical or mental disability.” One must report a vulnerable adult who is “abused, neglected, exploited or abandoned, or is committing self neglect.” Those terms are defined broadly, making for a correspondingly broad reporting requirement.
“Abuse” means “the intentional or reckless infliction, by the vulnerable adult's caregiver, family member or other individual.” “Neglect” is defined as “the deprivation of, or failure to provide, the minimum food, shelter, clothing, supervision, physical and mental health care, and other care necessary to maintain a vulnerable adult's life or health . . .” “Exploitation” is the broadest term:
[T]he reckless or intentional act taken by any person, or any use of the power of attorney, conservatorship or guardianship of a vulnerable adult, to obtain control through deception, harassment, intimidation or undue influence over the vulnerable adult's money, assets or property with the intention of permanently or temporarily depriving the vulnerable adult of the ownership, use, benefit or possession of his money, assets or property.”
Finally, “abandonment” means “leaving a vulnerable adult without financial support or the means or ability to obtain food, clothing, shelter or health care.”
As with the child abuse reporting law, anyone who makes a report “in good faith” is “immune from civil liability for making the report.” Presumably, the same standard for lack of “good faith,” deliberate falsity, will apply to this statute. Unlike the permissive reporting requirement for child abuse, however, the failure to report abuse, neglect, exploitation, or abandonment of a vulnerable adult is a misdemeanor, punishable by one year in jail, a fine of $1,000.00, or both
While an attorney’s obligation to not reveal confidential information is broad, there are numerous exceptions when disclosure is either ethically permitted or required. Disclosing confidential information is permitted when (1) a client makes an informed decision to allow disclosure, (2) disclosure is impliedly authorized to carry out the purposes of the representation, (3) the lawyer reasonably believes disclosure is necessary to prevent the client from committing a criminal act, (4) to obtain legal advice about the lawyer’s ethical obligations, (5) to defend a dispute involving a client or a former client, or (6) when necessary, to comply with law or court order.
Disclosure is required when doing so is necessary to avoid assisting a criminal or fraudulent act by a client, unless disclosure is prohibited by Rule 1.6, to report child abuse or abuse of a vulnerable adult, and, finally, an attorney probably has a tort duty to disclose information in some circumstances to prevent a client from committing a crime that involves death or substantial bodily harm (the key will be whether there is an identifiable potential victim).
John M. Burman teaches professional responsibility at the University of Wyoming College of Law. If there are issues you would like to see addressed in this column, Professor Burman may be reached by e-mail at firstname.lastname@example.org.
The views and opinions expressed and included in "Ethically Speaking" are those of the author only and do not constitute an opinion, finding or viewpoint, official or unofficial, of the Wyoming State Bar or the Board of Professional Responsibility.
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