Crpc 3-310

[Damaris]

Underthe old rule, no disclosure or consent was needed if other law authorizes nondisclosure, or if the lawyer was to render services on behalf of a public agency. (Former Rule 3-310(F)(3)(a)-(b).) The Comment to the former rule also indicated that the rule need not be followed in insurance situations where the insurer has the unilateral right to select the attorney for the insured, where there is no conflict of interest.

William M. Balin is a former chair of the San Francisco Bar Association Legal Ethics Committee. His solo practice is located in Pleasant Hill, California, and focuses on legal ethics consultations, fee disputes and State Bar discipline defense.

While many clients who prevail on their claims have little concern about how their attorney got there, clients who have not had their expectations matched by the outcome are frequently quick to criticize both the lawyer, and his ethics. When the first objective is not achieved, the secondary concern becomes paramount. Ethical breaches are a certain way to give the client unhappy about the results achieved a measure not only of revenge, but recompense, in a legal malpractice claim.

An ethical lapse is not always malpractice, but there are certain breaches of ethics which easily beget the malpractice claim. This article will explore some of the inter-relationships between the most frequent ethical violations and malpractice lawsuits against attorneys.

Although there is no independent cause of action for a violation of the rules of ethics set forth in the State Bar Rules of Professional Conduct, (Ross v. Creel Printing and Publishing (2002) 100 Cal.App.4th 436) an inter-relationship between violations of State Bar Rules and legal malpractice claims against attorneys is often inherent.

While the connection between the foundational ethical violation and a claim for malpractice is frequently obvious, characterization of the unethical conduct which makes the claim collectible against a malpractice policy needs far less precision and focus.

Additionally, it is important to recognize that violations of the Rules of Professional Conduct have significant career consequences, regardless of how they are characterized, or recharacterized. And, while claims of incompetent representation typically produce lawsuits first, and only secondarily, end up as the basis for State Bar proceedings, improper sexual relations with a client which produce State Bar proceedings have a much larger impact on the attorney. It is of little consolation that improper sexual relations with a client typically only produce monetary recoveries against the attorney on theories other than legal malpractice.

Although the Rule of Professional Conduct barring sexual relations with clients is not one of absolute prohibition, the myriad of other social consequences seldom make the risk worth taking. Both the State Bar Act and the CRPC prohibit the attorney from having sexual relations with a client, under the following circumstances:

One form of conflict arises when a lawyer simultaneously represents two or more clients with adverse interests. Concurrent representation of clients with adverse interests, while not necessarily an ethical violation, is certainly an ethical dilemma and needs to be dealt with openly, directly and impartially. Such conflicts commonly arise because the interests of several clients in the same matter are rarely identical, and any variance in their positions regarding any matter in controversy in the transaction or litigation matter may create a potential conflict, if not an actual conflict.

Conflicts from concurrent representation may arise innocently from circumstances including representation of several family members in a wrongful death case, particularly if the claim has a limited amount against which the clients can recover, such as a medical negligence, wrongful death case in which there is a ceiling under Civil Code section 3333.1 on the amounts that can be recovered. If representing all clients with the same level of skill and endeavor cannot be accomplished, the representation should not be continued.

A business transaction with a client or other transaction by which an attorney knowingly acquires a financial interest adverse to the client is ethically permissible only if the following requirements are met:

The proper response to a client conflict is one which is universally presumed: if an impermissible conflict exists before representation is undertaken, representation should be declined; if a conflict arises afterwards, the lawyer should withdraw.

Frequently, in conflict of interest claims, several different Rules of Professional Conduct come into play to determinate the existence of a conflict, and several common fact patterns repeatedly arise in the context of attorney negligence claims arising out of the conflicts that occur.

The Rules of Professional Conduct which typically come into play in a breach of fiduciary duty claim against a lawyer are also typically cited in actionable conflict of interest claims. Those are: Rule 3-300: Avoiding Interests Adverse to the Client, and Rule 3-310: Avoiding the Representation of Adverse Interests. While they sound generally the same, they state very distinct duties owed by the attorney, the breach of which may give rise to liability under Business & Professions Code section 6002.

A member shall not enter into a business transaction with a client; or knowingly acquire an ownership, possessory, security, or other pecuniary interest adverse to a client, unless each of the following requirements has been satisfied:

(A) The transaction or acquisition and its terms are fair and reasonable to the client and are fully disclosed and transmitted in writing to the client in a manner which should reasonably have been understood by the client; and

Thus, Rule 3-300 requires that the attorney avoid interests that are adverse to a client unless the terms of the transaction are fair and reasonable and disclosed and transmitted to the client in writing. Doing so may be found to be an acceptable conflict waiver, if it is a knowing waiver.

(3) The member has or had a legal, business, financial, professional, or personal relationship with another person or entity the member knows or reasonably should know would be affected substantially by resolution of the matter; or

Frequent circumstances encountered by contingency fee tort lawyers which seemingly violate the rule include the representation of both the driver and the passengers in an automobile collision, or the simultaneous representation of two or more clients injured in the same incident for which there are aggregate insurance policy limits which are insufficient for the damages suffered by each client. Representing both the driver and passenger in an auto accident case against a third party may produce conflicting responsibilities for the lawyer to each, competing causes of action, and different damage claims.

Under this standard, as described by the Orange County Bar Association in its local Formal Opinion 2012-01, the attorney may continue to represent the other client if he or she has not received confidential information from the now-former client substantially related to the current matter. In such situations, the duty of confidentiality, rather than the duty of loyalty, is primarily at stake (See, Flatt v. Sup Ct. (Daniel), supra.) Disqualification is typically only required when the attorney obtains confidential information from the former client material to the current employment, or a substantial relationship exists between the former and current representation.

As stated previously, the CRPC are disciplinary rules. However, attorneys who fail to disclose and resolve conflicts of interest may face potential malpractice exposure if the client is harmed. (See Klemm v. Superior Court (1977) 75 Cal.App.3d 893, 901; Ishmael v. Millington (1966) 241 Cal.App.2d 520). Again, the test of Budd v. Nixen, supra, applies, and the plaintiff must still demonstrate that the conduct of the attorney was a substantial factor in causing them harm.

Suing the client for fees, even when properly earned and deserved, is a sure path to antagonizing the client. The antagonized client will almost certainly question the competence and ethics of the lawyer, producing both State Bar issues and exposure to civil litigation.

Just as often, attorneys are accused of fraud in having billed for services not performed, or for reimbursement of costs not incurred. California Code of Civil Procedure section 338 provides a three-year statute of limitations for such claims. (Shafer v. Berger Kahn Shafton Moss Stigler Simon and Gladstone (2003) 1007 Cal.App.4th 54.) The disciplinary exposure period is limitless.

William Newkirk founded the Law Offices of William Newkirk, specializing in medical negligence, professional negligence and personal injury. He is a member of the American Board of Trial Advocates and the Consumer Attorneys Association of Los Angeles Board of Governors (Emeritus). Mr. Newkirk has received Recognition of Experience Certificates in Medical Negligence and Trial Practice. He is an author and lecturer on medical negligence and personal injury litigation, and is an occasional legislative witness in medical negligence issues. He received his B.A. from UCLA in 1970 and his J.D. from Southwestern University in 1974.

Dewey & LeBoeuf just acquired the entire bankruptcy team of Hennigan, Bennett & Dorman LLP that was headed by former founding and named partner Mr. Bruce Bennett. BankruptcyMisconduct readers have known for a while that some "dirty lawyering" was taking place over at Hennigan Bennett & Dorman. Well, it seems that some "changes" have been made and the firm is now renamed as Hennigan Dorman LLP.

Now let us re-freshen our minds about Bruce Bennett, Esq. as was featured on our SONICblue's Irish Neo-Mafia "O'Tools" page. On the subject of SONICblue court news, it is not our words but those of his own brethren lawyer who stated that Bruce Bennett engaged in an "insidious campaign to corrupt the administration" of that bankruptcy case.

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