UPON THE REQUEST OF A MEMBER OF THE SOUTH CAROLINA BAR, THE ETHICS ADVISORY COMMITTEE HAS RENDERED THIS OPINION ON THE ETHICAL PROPRIETY OF THE INQUIRER’S CONTEMPLATED CONDUCT. THIS COMMITTEE HAS NO DISCIPLINARY AUTHORITY. LAWYER DISCIPLINE IS ADMINISTERED SOLELY BY THE SOUTH CAROLINA SUPREME COURT THROUGH ITS COMMISSION ON LAWYER CONDUCT.
Ethics Advisory Opinion 93-38
After representing a client in a legal matter, the client files bankruptcy and lists the lawyer as a creditor. Lawyer intends to appear in Bankruptcy Court and defend against the client's discharge of the lawyer's claim.
Question
May the lawyer use confidential information obtained from the client or information obtained from public records in pursuing a claim for unpaid attorney fees against the client in the Bankruptcy Court?
Summary
The use of public record information obtained from the public domain in pursuing his claim for attorney fees would not violate the Rules of Professional Conduct. Further, a lawyer may also use confidential information obtained from the client in pursuing his claim for unpaid fees in the Bankruptcy Court.
Opinion
Rule 1.6, SCRPC, addressed the attorney's use of confidential information received from a client. Rule 1.6(a) provides that 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)" (emphasis added).
Rule 1.6(b) provides, "A lawyer may reveal such information to the extent the lawyer reasonably believes necessary: (1) to prevent the client from committing a criminal act; or (2) to establish a claim or defense on behalf of the lawyer in a controversy between the lawyer and the client...or to respond to allegations in any proceeding concerning the lawyer's representation of the client."
Rule 1.6(b)(1) would allow the lawyer to reveal confidential information in order to prevent the client from committing a future criminal act. In the bankruptcy setting, this may be an under reporting or non-reporting of the client's true assets to the Bankruptcy Court by filing a false federal document. If such were the case, the lawyer has an obligation to seek to persuade the client from committing the criminal act. If the client refused, the lawyer would have the option to disclose the information to the Bankruptcy Court.
Rule 1.6(b)(2) provides that the lawyer could use such information in order to establish a claim for his fee. Again, a probable situation would be where the client intended to under report his true net worth to the Bankruptcy Court. It would appear that Rule 1.6(b)(2) would not prohibit the lawyer from utilizing confidential information that he obtained during the course of his representation to establish his claim for payment of the client's outstanding debt.
The Comment to this section states "a lawyer entitled to a fee is permitted by paragraph (b)(2) to prove the services rendered in an action to collect it. This aspect of the rule expresses the principle that the beneficiary of a fiduciary relationship may not exploit it to the detriment of the fiduciary. As stated above, the lawyer must make every effort practicable to avoid unnecessary disclosure of information related to a representation, to limit disclosure of those having the need to know it, and to obtain protective orders or make other arrangements minimizing the risk of disclosure."