Editor's Note:
State Bar Ethics Opinions cite the applicable California Rules of Professional Conduct in effect at the time of the writing of the opinion. Please refer to the California Rules of Professional Conduct Cross Reference Chart for a table indicating the corresponding current operative rule. There, you can also link to the text of the current rule.
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May a lawyer who has successfully defended B in a lawsuit brought by A, thereafter represent A in a malpractice action against A's attorney which resulted in the loss of the lawsuit against B?
B's attorney may not communicate with A about the subject of the representation without the consent of A's counsel, unless A is no longer represented by counsel in the matter. Before B's attorney may represent A in the malpractice claim against A's former attorney, B's attorney must provide A with a written disclosure of the relevant circumstances and the actual and potential adverse consequences to A by reason of the representation of B. The disclosure should include the prospect of both B and B's attorney being witnesses in the malpractice action. B's attorney must also obtain the informed written consent of B, and if B continues to be a client, the attorney must obtain the written consent of both A and B. It is unlikely the attorney can comply with his or her obligation to provide A with written disclosure under rule 3-310(B) without B's consent to disclosure of any confidential information relevant to the representation of A. This Committee believes it would be imprudent for B's lawyer to accept the representation of A in a legal malpractice action against A's former attorney where the negligence of A's attorney resulted in the loss of the case against B. A's malpractice claim under these facts presupposes that A's claim against B was meritorious and that if A's attorney had handled the case properly, A would have prevailed against B. A lawyer who undertakes to represent a party in a matter which is inconsistent with lawyer's duties to a client or former client and which creates the potential for a disclosure of the former client's confidences opens the lawyer to claims of unprofessional conduct.
Rules 2-100, 3-310 and 5-210 of the Rules of Professional Conduct of the State Bar of California.
Business and Professions Code section 6068, subdivision (e).
An attorney represents B in a lawsuit brought by A. Plaintiff A, as a result of the malpractice of A's attorney, eventually loses the lawsuit against defendant B. Thereafter, A approaches B's attorney to represent A in an action A desires to file against his attorney for malpractice resulting in the loss of A's lawsuit against B. The factual situation presented to the Committee postulates that the attorney's negligence caused A to lose the case against B; that is, but for the negligence of A's attorney, A would have prevailed against B.1
Unless A has discharged his lawyer in the underlying action at the time A approaches B's attorney, B's attorney may not communicate with A under rule 2-100(A) about the subject of the representation in the underlying action without the consent of A's lawyer. Rule 2-100(A) provides: "While representing a client, a member shall not communicate directly or indirectly about the subject of the representation with a party the member knows to be represented by another lawyer in the matter, unless the member has the consent of the other lawyer." The proposed engagement of B's counsel by A involves the same subject matter as the lawyer's representation of B and therefore comes within rule 2-100. In this situation, B's attorney may not communicate with A about the malpractice suit against A's lawyer, unless (i) A's lawyer is no longer representing A in the matter or (ii) A's lawyer consents to the communication.
Rule 2-100(C)(2) creates an exception for communications initiated by a party seeking advice or representation from an independent lawyer of the party's choice.2 However, rule 2-100 (C)(2) does not apply to this situation. The discussion following rule 2-100 makes it clear that rule 2-100(A) is intended to apply where a lawyer is contacted by an opposing party who is represented by counsel and, because of dissatisfaction with that party's counsel, seeks the lawyer's independent advice. Since the lawyer in this situation is employed by the opposing party, he or she cannot give independent advice to A within the meaning of rule 2-100(C)(2).
The fact that judgment in the underlying case against A may have become final does not necessarily mean that the requirements of rule 2-100(A) do not apply. (See Carpenter v. State Bar (1930) 210 Cal. 520, 523; San Diego Cty. Bar Assn. Formal Opn. No. 1976-14.) The circumstances presented do not suggest that A's attorney has ceased to represent A in connection with any matters regarding the litigation. The entry of final judgment in an action does not necessarily terminate the attorney-client relationship. (See L.A. Cty. Bar Assn. Formal Opn. No. 411; Code Civ. Proc., § 284.)
Advising the opposing party concerning a malpractice claim that resulted in the client's successful defense in the litigation, could impair the B's confidence in the lawyer and the integrity of that attorney-client relationship. The lawyer's primary responsibility is to maintain loyalty to his or her client and to protect the client's secrets. (See Goldstein v. Lees (1975) 46 Cal.App.3d 614, 620.) Although an attorney is not prohibited from advising a client concerning a malpractice action against another attorney handling the same matter (see L.A. Cty. Bar Assn. Formal Opn. No. 390), in this situation advice by B's attorney concerning a malpractice action against A's attorney could be adverse to B's interests in the litigation between A and B. So long as such possibility exists, B's attorney should not communicate with A in any manner about A's claim against his attorney without B's consent.
Before B's attorney may represent A in a malpractice claim against A's former attorney, B's attorney must determine whether B's informed written consent is required by rule 3-310.3
Rule 3-310(E) provides: "A member shall not, without the informed written consent of the client or former client, accept employment adverse to the client or former client where, by reason of the representation of the client or former client, the member has obtained confidential information material to the employment."4
The attorney must obtain B's consent under rule 3-310(E) if accepting employment on behalf of A would be "adverse" to B and if the lawyer has obtained confidential information material to the employment. It is reasonably foreseeable in the situation presented, that acceptance of employment in A's malpractice action would be adverse to B under rule 3-310(E). In prosecuting A's malpractice claim, the attorney will be advocating that A's claim against B would have been successful but for the malpractice on the part of A's lawyer. A's malpractice claim would be adverse to B's interests since it presupposes that A's claim against B was meritorious and that had A's former attorney handled the case properly, A would have prevailed against B.
The inquiry is not limited to whether the malpractice suit by A against his former counsel would be adverse to the economic interests of B. The term "adverse" has been interpreted to include being "unfavorable" or "opposed to one's interest". (See David Welsh Co. v. Erskine & Tulley (1988) 203 Cal.App.3d 884, 891.) Here, the contemplated legal malpractice action is directly related to the subject matter of the attorney's representation of B. Even though B might not have a direct or personal stake in the outcome, prosecution of the malpractice action could adversely affect B's creditability, reputation or other interests.5 (See Cal. State Bar Formal Opn. No. 1980-52.) The fact that B would not desire a finding that A's claim against B was meritorious and that A would have succeeded in the claim had his former attorney handled the case properly is sufficient in this Committee's view to invoke rule 3-310(E).
The primary purpose of rule 3-310(E) is to protect the confidential relationship which exists between attorney and client. (Jacuzzi v. Jacuzzi Bros., Inc. (1963) 218 Cal.App.2d 24, 28.) A lawyer is forbidden to do either of two things after severing his or her relationship with a former client. "He may not do anything which will injuriously affect his former client in any matter in which he formerly represented him nor may he at any time use against his former client knowledge or information acquired by virtue of the previous relationship." (Galbraith v. State Bar (1933) 218 Cal. 329, 333.) Consent is required under rule 3-310(E) where the attorney has obtained confidential information that is material to the later representation. Confidential information is material if it is information the attorney should disclose in representing A in the new matter or which the new employment "inherently tempts the attorney to reveal or improperly monopolize." (Goldstein v. Lees, supra, 46 Cal.App.3d at p. 620; accord, Anderson v. Eaton (1930) 211 Cal. 113, 117; see L.A. Cty. Bar Assn. Formal Opn. No. 463.) The test is whether the acceptance of the new engagement will require the attorney, in advancing the interests of his or her new client, to do anything which would injuriously affect the former client in any matter in which the attorney formerly represented that client or to use against the former client any confidential information acquired through their former relationship. (Big Bear Municipal Water District v. Superior Court (1969) 269 Cal.App.2d 919, 927.)
The relationship between attorney and client is a fiduciary relationship of the very highest character. (David Welch Co. v. Erskine & Tulley, supra, 203 Cal.App.3d at p. 890.) Hence, the actual use or misuse of confidential information is not determinative. Rule 3-310(E) applies where the representation of the new client opens the attorney to the temptation of violating his or her obligation of fidelity and confidence. (Anderson v Eaton, supra, 211 Cal. at p. 117; David Welch Co. v. Erskine & Tulley, supra, 203 Cal.App.3d at p. 891; Big Bear Municipal Water District v. Superior Court, supra, 269 Cal.App.2d at p. 927.)
Rule 3-310(E) is designed to prevent lawyers from putting themselves in a position where they may be required to choose between conflicting duties or have to attempt to reconcile conflicting interests rather than to enforce to the fullest extent the rights of the client they should alone represent. (See Cal. State Bar Formal Opn. No. 1980-52.) Therefore, this Committee concludes that the attorney must obtain B's informed written consent to the employment by A in the proposed malpractice action.
The term "informed written consent" is defined in rule 3-310(A)(2) as the client's or former client's written agreement to the representation following written disclosure. "Written" and "disclosure" are defined terms under rule 3-310(A). "Disclosure" means informing the client or former client of the relevant circumstances and the actual and reasonably foreseeable adverse consequences to the client or former client. The term "written" means any writing as defined by Evidence Code section 250, which includes virtually any tangible form of communication so long as there is some record of the disclosure in the lawyer's file.
Unless B is a former client at the time the attorney accepts employment on behalf of A, the informed written consent of both A and B would be required under rule 3-310(C)(3).6 Rule 3-310(C)(3) provides "A member shall not, without the informed written consent of each client: . . . Represent a client in a matter and at the same time in a separate matter accept as a client a person or entity whose interest in the first matter is adverse to the client in the first matter."
Subparagraph (C)(3) is intended to deal with this situation where the lawyer represents B in the matter against A and later wishes to concurrently represent A in a separate case against A's counsel. In that event, the lawyer must obtain the written consent after disclosure of both A and B in order to be able to represent A in the malpractice case against A's counsel. As the discussion section following the rule points out, these written conflict waivers may not be sufficient for non-disciplinary purposes, such as disqualification or professional liability. (See Global Van Lines, Inc. v. Superior Court (1983) 144 Cal.App.3d 33; Klemm v. Superior Court (1977) 75 Cal.App.3d 893.)
In successfully defending B in the underlying action brought by A, B's attorney most likely obtained confidential information which will be material to the representation of A in the malpractice suit, but which B's attorney cannot divulge or use without B's consent. It is a fundamental duty of an attorney to "maintain inviolate the confidence, and at every peril to himself or herself to preserve the secrets, of his or her client." (Bus. & Prof. Code, § 6068 (e).) Client confidences means information as defined in Evidence Code section 952. This Committee has interpreted the first part of Business and Professions Code section 6068 (e) ("to maintain inviolate the confidence . . . of his or her client") to mean that an attorney may not do anything to breach the trust reposed in the attorney by the client. (See Cal. State Bar Formal Opn. No. 1986-87; Anderson v. Eaton, supra, 211 Cal. 113.) Client secrets means any information obtained by the lawyer during the professional relationship, or relating to the representation, which the client has requested to be inviolate or the disclosure of which might be embarrassing or detrimental to the client. (See Cal. State Bar Formal Opn. Nos. 1980-52 and 1981-58.) Hence, the attorney's duty to maintain client confidences and secrets inviolate is broader in scope than the attorney-client privilege. (See Wolfram, Modern Legal Ethics (West 1986) pp. 299-300, § 6.73.) The obligation to protect client confidences continues notwithstanding the termination of the attorney-client relationship. (Woods v. Superior Court (1983) 149 Cal.App.3d 931.)
This Committee is of the opinion that the attorney in this situation cannot discharge his or her obligation to A without client B's informed written consent to disclose confidential information obtained as a result of representing B in the matter. Under former rule 3-310(A), a lawyer could not accept or continue to represent a client if the lawyer had "a relationship with another party interested in the representation" or had "an interest in its subject matter" unless the lawyer obtained the informed written consent of all of the affected clients. New rule 3-310(B) clarifies the specific relationships and interests encompassed by former rule 3-310(A) and also expands the scope of the former rule to include past and present relationships with witnesses as well as parties in the subject matter of the representation. New rule 3- 310(B) deletes the requirement that the lawyer obtain the informed written consent of new client A in the situations addressed in paragraph (B) and instead provides that the lawyer may not represent the client where those types of conflicts exist without providing a written disclosure to the client, as defined in rule 3- 310(A). The attorney is required to inform A of the relevant circumstances and the actual and reasonably foreseeable adverse consequences to A by reason of representing B in the underlying case. (Rule 3-310(A)(1).)
In the situation presented, it would not be adequate for B's lawyer to obtain B's consent to take A's case without also obtaining B's informed written consent to reveal the confidences of B which are material to the case. In this situation, where the lawyer desires to take A's case and is seeking B's consent to do so, there may be an inherent conflict of interest in the lawyer obtaining the waiver, such that in this Committee's opinion the lawyer should offer B the opportunity to seek the advice of independent counsel concerning the waiver. As we opined in State Bar of California Formal Opinion Number 1984-83, "Perhaps the most fundamental quality of the attorney-client relationship is the absolute and complete fidelity owed by the attorney to his or her client." (See also Clancy v. State Bar (1969) 71 Cal.2d 140.) "It is also an attorney's duty to protect his client in every possible way, and it is a violation of that duty for him to assume a position adverse or antagonistic to his client without the latter's free and intelligent consent given after full knowledge of all of the facts and circumstances." (Anderson v. Eaton, supra, 211 Cal. at p. 116.) In any event, B's attorney in this situation has a continuing responsibility to obtain B's informed written consent in the event unanticipated circumstances arise which could adversely affect the attorney's representation of B even though such circumstances were not reasonably foreseeable at the time B's attorney accepted the representation of A in the malpractice claim.
B's attorney may not accept A's case without first providing A with written disclosure of any legal, business, financial, professional or personal relationship that attorney has with a party or witness in the same matter. (Rule 3-310(B)(1).) The same obligation exists if the attorney knows or reasonably should know that he or she previously had a legal, business, financial, professional or personal relationship with a party or witness in the same matter and the previous relationship would substantially affect the lawyer's representation. (Rule 3-310(B)(2).) Since it is reasonably foreseeable that B could or ought to be a witness in A's malpractice action against A's former attorney, written disclosure to A under rule 3-310(B)(1) is required if B is still the attorney's client. Even if B is a former client, written disclosure would likely be required under rule 3-310(B)(2), since the previous relationship would most likely substantially affect the attorney's representation of A.7 It does not seem possible for B's lawyer to be able to take B's deposition in the malpractice action, for instance, without B's informed consent to disclose relevant confidences and secrets relating to the prior representation. This Committee concluded in its State Bar Formal Opinion Number 1980-52 that it was improper for counsel in a criminal case to represent a defendant where a previous client of that attorney's office is a witness against the new client, and it is reasonably foreseeable that the confidences or secrets of the former client may be, or may reasonably appear to the client to be, used, citing Business and Professions Code section 6068 (e) and former rule 4-101, the predecessor to rule 3-110(E). It is clear based upon our earlier opinion that B's attorney may not accept employment on behalf of A which involves the use of confidential information obtained as a result of his or her representation of B where B does not consent to complete disclosure.
In addition to B being a potential witness, it is also reasonably foreseeable that B's attorney may be a witness in A's malpractice action. Independent counsel for A could conclude that B's attorney should testify on A's behalf by virtue of successfully representing B in defense of the underlying case. Aside from the attorney's own professional judgment on whether he or she should be a witness for A, the attorney would be subject to being called as a percipient witness by the other side in the malpractice action. In either event, as a potential witness in the malpractice action the attorney would be required not to disclose confidential information acquired by virtue of the prior representation of B, without B's informed written consent, and at the same time not give testimony which would be adverse to A's case.
If B's attorney knows or should know that he or she ought to or will be called as a witness in A's malpractice action, and the case will be tried before a jury, B's counsel may not represent A without A's informed written consent. (Rule 5-210.) Although this rule no longer applies to actions tried before a judge, the decision to try the malpractice action before a court or a jury could be influenced by the attorney's role as a potential witness in the action. Clearly, if B's attorney knows or should know that he or she would be an adverse witness against A in the malpractice suit, the attorney should decline employment as A's attorney in that action.8
The Committee is of the opinion that the perils presented in this situation create such a potential risk of violation of the attorney's ethical duties to one or both clients, that a prudent lawyer should not accept the representation of an opposing party in a legal malpractice action against the party's former attorney. If B's lawyer chooses to proceed, it would be advisable in the Committee's view for B's counsel in this situation to advise A as well as B in writing that each should seek the advice of independent counsel on these issues. B's consent to allow the attorney to take A's case would necessarily include permission to disclose B's confidences material to the representation of A. Without first obtaining the informed consent of B, it is unlikely the attorney would be able to provide adequate disclosure of the relevant circumstances and adverse consequences to A and, if necessary under rule 3-310(C)(3), obtain A's informed written consent to the representation. If the attorney cannot competently represent A because of restraints on the use of confidential information, accepting the representation of A could be a violation of rule 3-110. The attorney in the situation presented owes the highest duty to both the new and former client to make a full disclosure of all facts and circumstances which are necessary to enable each to make a fully informed decision regarding the subject matter of the litigation, including the areas of potential conflict and the possibility and desirability of seeking independent legal advice. (Ishmael v. Millington (1966) 241 Cal.App.2d 520.)
This opinion is issued by the Standing Committee on Professional Responsibility and Conduct of the State Bar of California. It is advisory only. It is not binding upon the courts, the State Bar of California, its Board of Governors, any persons or tribunals charged with regulatory responsibilities or any member of the State Bar.
1 The Committee recognizes there are situations where the lawyer's negligence would not bear on B's liability to A such that B's interest might not be adversely affected by A's malpractice action, such as where a client has incurred legal expenses pursuing litigation recommended by counsel which lacked merit.
2 Rule 2-100(C) provides that rule 2-100 "shall not prohibit . . . (2) Communications initiated by a party seeking advice or representation from an independent lawyer of the party's choice; . . . ."
3 Rule 3-310 on avoiding representation of adverse interests underwent substantive changes which took effect on September 14, 1992.
4 New rule 3-310(E) is the same as former rule 3-310(D) except for several stylistic changes. No substantive change was intended.
5 As an example, if the underlying action by A against B involved a suit for damages under the securities laws, the malpractice case against A's lawyer could result in a finding that B had committed a securities violation, which could be adverse to B's interests.
6 Rule 3-310(C) continues the concepts found in former rule 3-310(A) and (B) regarding concurrent representation of clients whose interests conflict.
"A member shall not accept or continue representation of a client without providing written disclosure to the client where:
. . .
(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; . . ."
8 Although rule 5-210 is not intended to apply in the situation where a partner or associate of an advocate's firm will be a witness, rule 3-310(B)(1) would appear to require written disclosure to A, since the relationship between the advocate and the partner or associate witness is a personal, professional, business and legal relationship.
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