Opinion 98-5
(March 1998)

You have asked for an opinion from the Professional Guidance Committee on the following facts. You represent a client in a slip and fall matter that currently is on appeal from an arbitration decision. A newspaper article has implicated your client in allegations of insurance fraud in a matter not related to your representation of the client. After conversations with the client, you believe a conviction or guilty plea is likely. You ask if 1) you can/should continue to represent your existing client; 2) whether you can pursue settlement of the existing matter that is the subject of your representation; 3) whether you should have the client confirm the veracity of information s/he already has provided to you; 4) whether you can withdraw from the representation.

The questions raised by your inquiry are best addressed in reverse order. With regard to the last question, the pertinent Pennsylvania Rule of Professional Conduct is Rule 1.16, "Declining or Terminating Representation." Rule 1.16b provides, in pertinent part, as follows:

...a lawyer may withdraw from representing a client if withdrawal can be accomplished without material adverse effect on the interests of the client...

Here, the matter is on appeal and it does not appear that a trial date has been given. Thus, based upon the facts presented, it would appear that withdrawal can be accomplished without adversely affecting the client's interests in a material way.

With regard to the question of whether you should ask the client to verify information previously provided, it is the opinion of the Committee that the concepts of competence, diligence and candor toward the tribunal require that you make such an inquiry of the client.

Rule 1.1 ("Competence") states:

A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation necessary for the representation. (emphasis added).

Rule 1.3 ("Diligence") states:

A lawyer shall act with reasonable diligence and promptness in representing a client.

Rule 3.3 ("Candor Toward the Tribunal") states in pertinent part, as follows:

A lawyer shall not knowingly: (1) make a false statement of material fact or law to a tribunal; (2) fail to disclose a material fact to a tribunal when disclosure is necessary to avoid assisting a criminal or fraudulent act by the client[.]

It is the opinion of the Committee that your obligations to both the Court and the client require you to explore the truthfulness of the client's previous statements to you. As an initial matter, the new allegations of insurance fraud place the client's credibility square at issue, and have a direct impact on your ability to resolve the slip and fall claim, whether by trial or settlement. Further, you must ensure that you do not assist the client in perpetrating a fraud.

The answer to the second question raised by your inquiry, whether you can settle the slip and fall matter, will be a function of your professional judgment and your client's response to your direct questioning about the veracity of his/her prior statements to you. If the client stands by the statements previously provided in the slip and fall matter, you have no basis to assume s/he is attempting to commit a fraud. In this instance, you will be faced with the strategic decision of whether settlement is in the client's best interest in light of the insurance fraud issues that may confront the client at trial.
 
On the other hand, if the client acknowledges that the instant slip and fall matter is the product of a fraudulent design, then considerations of candor will preclude you from settling the case and should your client refuse to withdraw such fraudulent claim, the Committee directs your attention to Rules 3.3(a)(1), (2) & (4). Also pertinent is Rule 4.1, which provides:

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 the Committee that your first question, regarding the propriety of continued representation, will be answered by virtue of the answers provided and decisions rendered in response to the above questions.
   

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.