Opinion 2005-15
(October 2005)

The inquirer has presented the Committee with an inquiry. The pertinent facts are as follows:

  1. The inquirer was hired by insurance company to represent both its insured “A”, who is a defendant in a motor vehicle negligence case as well as “B”,(who was operating “A’s” automobile with permission), also a defendant.
  2. The inquirer filed an Answer to the Complaint, on behalf of “A” and “B”, which, inter alia, admitted that “A” was owner of the car and lived at an address in New Jersey; the Answer was verified by “A”.
  3. The inquirer answered written discovery, motor vehicle interrogatories, expert interrogatories and surveillance interrogatories, each with verification signed by “A”.
  4. Each of the verifications was provided to inquirer by “B”, who advised that “A” signed them.
  5. Thereafter, “B” (after seeking assurance that his statement was an attorney-client communication) advised inquirer that “A” does not exist, that he (“B”) obtained “A’s” name from a gravestone, got “A” a social security number and a driver’s license, and secured and paid for the pertinent insurance coverage for “A”.
  6. Among the several reasons recounted by “B” to inquirer for proceeding as stated is that “B” in his own name would have been unlikely to obtain insurance coverage, or the quote would have been substantially higher.
  7. The pertinent insurance policy was later canceled by carrier for non payment of premium, but that cancellation did not affect coverage for the subject motor vehicle negligence case.
  8. Depositions of “A” and “B” are scheduled for November.
  9. “B” has advised the inquirer that “B” is able to have his brother testify at the depositions in November and pretend to be “A”.
Many of the issues raised by the client’s course of conduct are addressed in Opinion 2005-11, a copy of which is included with this response. The Pennsylvania Rules of Professional Conduct (the “Rules”) which govern this inquiry are 1.6, 1.7, 1.16, 3.3 and 4.1.

Rule 1.6 Confidentiality of Information

  1. A lawyer shall not reveal information relating to representation of a client unless the client gives informed consent, except for disclosures that are impliedly authorized in order to carry out the representation, and except as stated in paragraphs (b) and (c).
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(a) A lawyer shall reveal such information if necessary to comply with the duties stated in Rule 3.3.
(b) A lawyer may reveal such information to the extent that the lawyer reasonably believes necessary:

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(2) To prevent the client from committing a criminal act that the lawyer believes is likely to result in substantial injury to the financial interest or property of another;

(3) To prevent, mitigate or rectify the consequences of a client’s criminal or fraudulent act in the commission of which the lawyer’s services are being or had been used. (emphasis supplied).

Rule 1.7. Conflict of Interest: Current Clients:

(a) Except as provided in paragraph (b), a lawyer shall not represent a client if the representation involves a concurrent conflict of interest. A concurrent conflict of interest exists if:

(1) The representation of one client will be directly adverse to another client;

or

(2) There is a significant risk that the representation of one or more clients will be materially limited by the lawyer’s responsibilities to another client, a former client or a third person or by a personal interest of the lawyer.

Rule 3.3 Candor Toward the Tribunal:

(a) A lawyer shall not knowingly: (1) make a false statement of material fact or law to a tribunal or fail to correct a false statement of material fact or law previously made to the tribunal by the lawyer;

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(c) The duties stated in paragraphs (a) and (b) continue to the conclusion of the proceeding, and apply even if compliance requires disclosure of information otherwise protect by Rule 1.6 (emphasis supplied).

The explanatory comments to Rule 3.3 have a section entitled “Remedial Measures” which provides as follows:

Having offered material evidence in the belief that it was true, a lawyer may subsequently come to know that the evidence is false, or, a lawyer may be surprised when the lawyer’s client, or another witness called by the lawyer, offers testimony the lawyer knows to be false, either during the lawyer’s direct examination or in response to cross examination by the opposing lawyer. In such situations or if the lawyer knows of the falsity of testimony elicited from the client during a deposition, the lawyer must take reasonable remedial measures. In such situations the advocate’s proper course is to remonstrate with the client confidentially, advise the client of the lawyer’s duty of candor to the tribunal and seek the client’s cooperation with respect to the withdrawal or correction of the false statement of evidence. If that fails, the advocate must take further remedial action. If withdrawal from the representation is not permitted, or will not undo the effect of the false evidence, the advocate must make such disclosure to the tribunal as is reasonably necessary to remedy the situation, even if doing so requires the lawyer to reveal information that otherwise would be protected by Rule 1.6. It is for the tribunal then to determine what should be done – making a statement about the matter to the trier of fact, ordering a mistrial, or perhaps nothing. (emphasis supplied)

Rule 4.1 Truthfulness in Statements to Others:

In the course of representing a client a lawyer shall not knowingly:

(a) make a false statement of material fact of material fact or law to a third person; or

(b) fail to disclose a material fact to a third person when disclosure is necessary to avoid aiding and abetting a criminal or fraudulent act by a client, unless disclosure is prohibited by Rule 1.6.

The inquirer poses the following questions:

(1) May the inquirer continue to represent “B” without disclosing to either the court or insurance carrier what the inquirer has learned?

The Committee’s answer is “no.” With regard to the court, Rule 3.3(b) requires that the inquirer take “reasonable remedial measures”. As noted, there are reasonable measures which can be sufficient, short of unilaterally notifying the court, as set forth in the explanatory comments to 3.3 above, and thus the Committee agrees with the inquirer’s implicit suggestion of securing “B’s” informed consent to reveal the information. The Committee hastens to point out that as part of providing informed consent to “B”, the inquirer should advise “B” to immediately consult a criminal lawyer.

However, because of “B’s” offer to have someone attend as “A”, the Committee finds that a quiet withdrawal does not discharge the inquirer’s obligations under the Rules. Thus, if “B” will not cooperate with respect to correction of the false statements, then the inquirer must make such disclosure to the tribunal. The disclosure should be in writing, and filed under seal.

The question of disclosure to the carrier presents issues under Rules 1.6, 1.7 and 4.1. Here, Rule 1.6 (c) permits the inquirer to reveal (“may reveal”) such information as the inquirer “reasonably believes necessary” in order to “prevent, mitigate or rectify the consequences of [the] client’s criminal or fraudulent act, in the commission of which the [inquirer’s] services are being or had been used.” While the inquirer’s services were not used in the original fraudulent act in obtaining the coverage, they have been used in continuing the fraud in this litigation. Rule 4.1(b) prohibits the inquirer from knowingly failing to disclose a “material fact” to a third party, when disclosure is necessary to avoid aiding and abetting a client’s fraudulent act.

Therefore, if the inquirer decides to withdraw from the representation, he may reveal to the carrier that “A” does not exist. Note that the inquirer’s withdrawal from representation, must comply with the requirements of Rule 1.16. If the inquirer decides not to withdraw from the representation, then Rule 4.1 requires that the inquirer advise the carrier that “A” does not exist. However, in either event, the Committee concludes that the inquirer does not need to disclose to the carrier the reasons for “B’s” conduct, but allow the carrier to investigate same.

(2) May the inquirer continue to represent “B” if he gives the inquirer informed consent to disclose what “B” has advised the inquirer regarding “A”?

The Committee’s answer is “yes”, the inquirer can continue to represent the client, so long as the inquirer is able to meet the requirements of Rule 1.7. That is, if there is a significant risk that the inquirer’s diligence or competence on behalf of “B” will be “materially limited” by the inquirer’s responsibilities to the insurance carrier, then the inquirer must comply with the requirements of Rule 1.7b.

(3) The inquirer asks what his obligations are under Rule 1.6 with regard to advising the insurance carrier and plaintiff’s attorney as to what the inquirer has learned.

The Committee has already responded to this question with regard to advising the insurance carrier. As regards the inquirer’s obligations to plaintiff’s attorney, the Committee believes that the inquirer needs to correct any material information that is not correct and has been provided in the litigation, i.e. in pleadings, verifications and discovery responses which should be amended or supplemented to reflect accurate information.

(4) The inquirer asks what his obligations are under Rule 3.3 to the tribunal to advise them of the misrepresentations that have been made in the pleadings and discovery responses.

This has already been addressed in the response to the first question.

CAVEAT: The foregoing opinion is advisory only and is based upon the facts set forth above. The opinion is not binding upon the Disciplinary Board of the Supreme Court of Pennsylvania or any other Court. It carries only such weight as an appropriate reviewing authority may choose to give it.