Opinion 94-21
(October 1994)

You represent a claimant in a worker's compensation case. You have requested an Opinion from the Philadelphia Bar Association’s Professional Guidance Committee as to whether you have a duty to inform defense counsel that the claimant is incarcerated after a conviction, a fact that could affect his worker compensation. You provided us the following facts concerning representation:


Claimant first contacted you when his worker's compensation checks stopped arriving. There was an open Notice of Compensation Payable (NCP), which meant that the employer acknowledged that there was a compensable work-related injury. Once an NCP is issued, the employer can stop compensation payments only by following certain procedures. There was also pending an open petition to compel an "independent" medical exam (IME). An IME is a medical examination by a doctor selected by the employer, and the employer can file a petition for IME when there are scheduling problems or when claimant refuses to attend an examination.

In this case, you called defense counsel to suggest that compensation was improperly discontinued, and should be resumed. With claimant's consent, you and defense counsel agreed that the payments would resume and that the claimant would attend an IME. Claimant was not incarcerated at this time.

A week later, you heard from claimant's friend that the payments had resumed, but that the claimant had been sent to jail about a week after receiving his first check. At this time, you did not know the terms of incarceration and you called defense counsel to cancel the IME and select a new date. You later learned that claimant was sentenced to three months and that there had, indeed, been a conviction for criminal contempt for violation of a restraining order obtained by the claimant's ex-wife. Once again, you cancelled the IME. Presently, claimant is in jail and is receiving worker's compensation checks.

The only matter still pending is the narrow issue of whether your client must attend a medical examination. You have not been asked by the tribunal to disclose your client's whereabouts. You expect defense counsel to call you to reschedule the examination and he may inquire as to your client's whereabouts.

Disclosure of your client's incarceration would adversely affect him by causing additional litigation and possible cessation of wage benefits under the Worker's Compensation Act (Act). You want to know whether disclosure is mandatory, prohibited or permissible under the Rules of Professional Conduct and the relevant provisions of the Act. Your research has revealed no regulations or case law on this issue, and the worker's compensation attorneys you have consulted disagree on the statutory construction. Your client has instructed you to "do what you decide you have to do."

Section 301(a) (2) of the Act provides: "Nothing in this Act shall require payment of compensation for any period during which the employee is incarcerated after a conviction." This provision became effective in August, 1993, and you have found no cases interpreting it. There are no provisions for enforcement of this section.

Article XI of the Act, entitled "Insurance Fraud", addresses certain defined fraudulent offenses and makes reference to the Pennsylvania Rules of Professional Conduct. In particular, Section 1102 states in part that a person (including the employee and the attorney) commits an offense if the person does any of the following:

(2) Knowingly and with the intent to defraud any insurer, presents or causes to be presented to any insurer any statement1 forming a part of, or in support of, a worker's compensation insurance claim2 that contains any false, incomplete or misleading information concerning any fact or thing material to the workers' compensation insurance claim.

(5) Knowingly benefits, directly or indirectly, from the proceeds derived from a violation of this section due to the assistance, conspiracy or urging of any person.


(7) Knowingly and with the intent to defraud, assists, abets, solicits or conspires with any person who engages in an unlawful act under this section.

Section 1105 provides that a violation of Section 1102 constitutes a felony of the third degree, and shall subject the attorney to disciplinary action. Section 1108, however, provides:

Nothing in this article shall be construed to prohibit any conduct by an attorney or law firm which is expressly permitted by the Rules of Professional Conduct of the Supreme Court, by statute or by regulation...

It is the opinion of this Committee that this last provision requires that you first determine whether non-disclosure is permitted under the Rules of Professional Conduct. The relevant Rules are those that discuss criminal or fraudulent acts by the attorney, and criminal or fraudulent acts by the client in the context of attorney truthfulness and client confidentiality.

I. Criminal or Fraudulent Acts by an Attorney


The Rules of Professional Conduct proscribe criminal acts or fraud by an attorney:

Rule 8.4 Misconduct:

It is professional misconduct for a lawyer to:

(b) commit a criminal act that reflects adversely on the lawyer's honesty, trustworthiness or fitness as a lawyer in other respects;

(c) engage in conduct involving dishonesty, fraud, deceit or misrepresentation.

The Terminology section at the beginning of the Rules of Professional Conduct defines the term "Fraud" as follows, "'Fraud' or 'Fraudulent' denotes conduct having a purpose to deceive and not merely negligent misrepresentation or failure to apprise another of relevant information." It is the opinion of this Committee that your failure to apprise defense counsel that your client is receiving compensation while incarcerated is not a violation of Rule 8.4(c).

The term "criminal act" is not defined in the Rules of Professional Conduct; therefore, as to Rule 8.4(b), you must be guided by the provisions of Article XI Section 1102 of the Worker's Compensation Act, Insurance Fraud, because a violation of Section 1102 is both a felony of the third degree and subjects the attorney to disciplinary action pursuant to Section 1105. This strongly suggests that a violation of Section 1102 constitutes a crime "that reflects adversely on the lawyer's honesty, trustworthiness or fitness as a lawyer in other respects," within the meaning of Rule 8.4(b). It is the opinion of this Committee that you must determine whether mere non-disclosure of your client's incarceration in the context of scheduling a medical examination constitutes a "statement" for an "insurance claim", as those terms are defined and discussed by Sections 1101 and 1102 of the Act.

If you determine that your non-disclosure is a crime under Article XI of the Act, then Rule 8.4(b) of the Rules of Professional Conduct requires that you disclose claimant's incarceration when defense counsel contacts you to reschedule the medical examination. If, however, you determine that such nondisclosure is not a crime under the Act, you need not disclose the incarceration to the defense.3

It is the further opinion of this Committee that Section 306 of the Act, which provides a basis for stopping benefits during periods of incarceration, creates no separate obligation for the attorney under Rule 8.4 of the Rules of Professional Conduct.

II. Criminal or Fraudulent Acts by the Client


The Rules of Professional Conduct dealing with attorney truthfulness, and client confidentiality govern the attorney's obligation regarding non-disclosure, in the context of whether such non-disclosure constitutes a crime or fraud by the client.

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 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.

It is the opinion of this Committee that Rule 4.1(a) prohibits you from actually lying about your client's whereabouts. For example, you may not say that your client is unavailable for his medical examination because he is on vacation or because he ill. Rule 4.1(b) governs whether non-disclosure is a violation, and requires a two step analysis. First, you must determine whether disclosure is necessary to avoid aiding and abetting a criminal or fraudulent act by the claimant. This analysis is similar to what you did to determine whether your own conduct would be a crime or fraud, and requires that you consult Article XI of the Worker's Compensation Act. If you determine that the client commits no crime by non-disclosure, your inquiry is ended. Failure to disclose your client's whereabouts would not be a violation of Rule 4.1(b).

If, however, you determine that your client has violated Article XI by non-disclosure, your inquiry is not ended; there is a second step to the analysis. You may not disclose the claimant's incarceration if disclosure is prohibited by Rule 1.6, which provides in relevant part:

Rule 1.6 Confidentiality of Information

(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 paragraphs (b) and (c).

(b) A lawyer shall reveal such information if necessary to comply with the duties stated in Rule 3.34.

(c) A lawyer may reveal such information to the extent that the lawyer reasonably believes necessary:

(1) to prevent the client from committing a criminal act that the lawyer believes is likely to result in death or substantial bodily harm or substantial injury to the financial interests or property of another;

(2) to prevent or to 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; . . . .

It is the opinion of the Committee that you do not have client consent under Rule 1.6(a), because your client instructed you to "do what you decide you have to do." Fairly interpreted, this means he does not want you to disclose any more than the law and rules require.

Thus, you must determine whether the situation falls within either of the exceptions of 1.6(c) (1) or (2). These exceptions are permissive; in other words, you may reveal the information of your client's incarceration, but only if you reasonably believe it is necessary to prevent the client from committing a criminal act or to rectify the consequences of a criminal act in which your services were being used. Rule 1.6 does not, however, mandate such disclosure. This distinction is important because of the language of Section 1108 of the Worker's Compensation Act. Section 1108 states that nothing in Article XI dealing with insurance fraud shall be construed to prohibit conduct by an attorney or law firm which is expressly permitted by the Rules of Professional Conduct. Since Rule 1.6 permits you to maintain client confidentiality in these circumstances, you would not be committing a violation of Article XI by keeping silent on the fact of your client's whereabouts. You may not, however, affirmatively misrepresent his whereabouts when asked, for the reasons stated earlier in this Opinion.

In summary, the Rules of Professional Conduct prohibit affirmative misrepresentation of your client's unavailability. They create no obligation, however, on your part to take the initiative by disclosing to defense counsel or the carrier the fact that your client has been receiving worker's compensation benefits while incarcerated, unless you determine that non-disclosure is a crime by the attorney under Article XI. In that case, your silence would violate Rule 8.4(b).

Notes
  1. Section 1101 defines the term "Statement": "'Statement' means any oral or written presentation or other evidence of loss, injury or expense, including, but not limited to, any notice, statement, proof of loss, bill of lading, receipt for payment, invoice, account, estimate of property damages, bill for services, diagnosis, prescription, hospital or doctor records, x-ray, test result or computer-generated documents.

  2. Section 1101 of the Act defines "Insurance claim" as follows:

    "Insurance claim' means a claim for payment or other benefits pursuant to an insurance policy for workers' compensation."

  3. The Committee also cautions that some statutes contain an omnibus provision which imposes a continuing duty to disclose new information.

  4. Rule 3.3 involves the lawyer's duty of candor toward the tribunal. In your case, no tribunal has asked your client's whereabouts. If you do appear before a tribunal, which includes a worker's compensation referee, on the Petition to Compel IME, your duties will be governed by Rule 3.3.

   

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.