Opinion 94-15
(September 1994)

You have requested advice based on the following facts: you represent Corporation A, which has been sued for professional negligence by Corporation B. B claims that A's Chairman testified negligently to B's detriment in the earlier case B v. C and D.

B has sued A and seeks damages which equal the difference between the amount of settlement actually obtained in the case B v. C and D, and the damages that allegedly would have been recovered in that case had A's Chairman properly testified.

The settlement of B v. C and D was subject to a settlement agreement, which included a confidentiality provision, precluding the release of the terms of the settlement agreement, absent judicial compulsion. The confidentiality provision was drafted at the request of C and D. We understand that there was no confidentiality order, but rather a stipulation among B, C and D.

In the present litigation, D (pursuant to a Rule 45 subpoena served by B) produced for all parties' inspection, 25 boxes of documents. In the course of reviewing those boxes, you reviewed a document which you believe to be the final unexecuted draft of the settlement agreement between B, C and D, You indicate that you have otherwise also seen correspondence between B, C and D, giving you enough familiarity with the settlement agreement to believe that the document you reviewed is a final draft.

You have asked us five questions relating to disclosure of your review of the draft settlement agreement and copying of it. This guidance committee has prepared three opinions which are pertinent to your inquiry here. Inquiries 89-13, 91-19 and 94-3 are all attached hereto. We believe that the (inadvertent) production of this protected material raises legal issues for resolution by a court of competent jurisdiction, relating to waivers of privilege, breach of agreement, trial admissibility and other issues. It does not raise ethical issues on the part of the receiving attorney.

Finally, the ABA has issued formal opinion 92-368 and this guidance committee has addressed it specifically in 94-3.

Let us address each of your questions:

1. To whom may this information be disclosed?

Response: The requirements of Rule 1.6(a) suggest that the information should not be disclosed other than to your client. Rule 1.6(a) provides in pertinent part:

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 subparagraphs (b) and 8 .

The exceptions of subparagraphs (b) and 8 do not apply here. Furthermore, the requirements of Rules 1.1, 1.3 and 1.4(b) (competence), (diligence) and (communication) suggest that you must be diligent on behalf of your client and that you must keep the client informed. Of course, there are other issues other than ethical issues, including trial admissibility. Specifically, the issue of inadvertent waiver of confidentiality is different for C than for either B or D. Such legal issues, however, are beyond the purview of your inquiry or of this committee.

2. To whom must it be disclosed?

Response: As indicated above, it must be disclosed to your client.

3. Whether the aforesaid draft settlement agreement may be copied at [your] request?

Response: Yes, when you request copies of other documents produced in compliance with a subpoena, you may request that document as well.

4. A determination of whether and to whom he [inquirer] is compelled to reveal that [inquirer] has observed this information.

Response: Based on the facts as stated above, we do not believe that there is now any requirement that you furnish this information to anyone other than your client. You may provide this information at such time as in your judgment it would serve your client's interest for you to do so.

5. Guidance pertaining to any other relevant issues that may arise out of the knowledge of the terms and conditions of the confidential settlement agreement.

Response: This is too broad and speculative for us to comment on at this time.

There are a number of reported decisions regarding the various pretrial and evidential issues raised by such documents received via the inadvertent production of privileged or protected materials. Some of there are cited in our Opinion 94-3. We further refer you to the article by James Ulwick, Producing by Mistake, Volume 18 Litigation, No. 3 at p. 20, Spring 1992. Obligations of competence and diligence require that you be familiar with those opinions as the matter goes forward.

 

The Philadelphia Bar Association's Professional Guidance Committee provides, upon request, advice for lawyers facing or anticipating facing ethical dilemmas. Advice is based on the consideration of the facts of the particular inquirer's situation and the Rules of Professional Conduct as promulgated by the Supreme Court of Pennsylvania. The Committee's opinions are advisory only and are based upon the facts set forth. The opinions are not binding upon the Disciplinary Board of the Supreme Court of Pennsylvania or any other Court. They carry only such weight as an appropriate reviewing authority may choose to give it.