Ethics and Disclosure

This month's IICLE Ethics Flash Points newsletter (written by Terrence P. McAvoy and Thomas P. Sukowicz of Hinshaw & Culbertson) presents an interesting case involving a probate attorney and a potential disciplinary violation.  The case is from New Hampshire, and is called In re Lane -- it's published at 889 A.2d 3.

Lane represented Dick, the executor of Robert's estate (Dick was also Robert's son).  After the estate was closed, Lane found out about a life insurance policy on Robert's life.  The policy was payable to Robert's surviving spouse (Jane), but Dick deposited it into a joint account owned by him and Jane.

Lane gave information about Dick's disposition of the insurance policy to the attorney for Robert and Jane's daughters, who was preparing a petition to remove Dick as Jane's guardian.  Dick's attorney reported Lane to the New Hampshire Supreme Court's Committee on Professional Conduct.

Did Lane do anything wrong?  According to the court, he didn't, because of New Hampshire Rule of Professional Conduct 1.6, which governs attorney-client confidentiality.  The Rule is as follows:

(a) A lawyer shall not reveal information relating to representation of a client unless the client consents after consultation, except for disclosures that are impliedly authorized in order to carry out the representation, and except as stated in paragraph (b).

(b)  A lawyer may reveal such information to the extent the lawyer reasonably believes necessary... to prevent the client from committing a criminal act that the lawyer believes is likely to result in death or bodily harm or substantial injury to the financial interest or property of another.... (emphasis added)

Unfortunately, a different result would be reached under Illinois' Rule 1.6, which provides an exception under 1.6(b) only "to the extent it appears necessary to prevent the client from committing an act that would result in death or serious bodily harm" -- Illinois doesn't have an exception for injury to someone's financial interest or property.  In other words, if I (as an Illinois attorney) had done what Lane did in the above case, I would be subject to discipline by the Illinois Attorney Registration and Disciplinary Commission.  That doesn't seem so fair, does it?

I try to address the issue of confidentiality when I enter into an engagement with an executor or administrator.  I require my clients to consent to my release of otherwise confidential information if it indicates that the clients engaged in wrongdoing.  Of course, this language appears to be ineffective, since Illinois Rule 1.6(a) prevents me from revealing client information "unless the client consents after disclosure" (emphasis added).

Comments

[Stan Rule]

This is quite an interesting post. Lane's client was Dick, but I take it that Lane was representing Dick in Dick's representative capacity as executor of Dick's father's will. Apart from the rule of professional conduct that you quoted, does Lane also have duties to Robert's beneficiaries? I think many beneficiaries do look to an executor's lawyer to make sure that the estate is properly handled. They probably expect that the lawyer will take steps to prevent any wrongdoing, and this may include disclosure to them. I don't know what the answer is, but I agree that this kind of situation raises a difficult ethical problem for estate lawyers.

[Joel S.]

Interesting point, Stan. In most states in the US the assumption is that the attorney is representing the executor of the estate, NOT the beneficiaries. The question of whether an American attorney has a duty to estate beneficiaries strikes me as a complicated one. How does Canada view this relationship?

[Stan Rule]

Joel: I take the same view when I am retained by an executor for an estate. The executor is my client, and not the beneficiaries. In some cases, such as contested executor's accounts, I may be taking an adversarial position against the beneficiaries. But, I am not sure that precludes the executor's lawyer from owing some duty to the beneficiaries if the executor is clearly committing a breach of trust. I am not aware of any Canadian law directly on point.