What the Ethical Rules Say About Conflicts of Interest, Client Screening, and Informed Consent
By John Lande – Professor/Director/Author (Missouri) and Forrest S. Mosten – Family Lawyer/Mediator/Author (California)
To read Part 1 click here.
The existence of any of these factors does not necessarily preclude lawyers from undertaking a CL representation. Rather, these factors should help guide lawyers in complying with their ethical obligations. If there is a significant risk that using CL in a case would not realistically advance a client’s (or prospective client’s) interests, the New Jersey opinion holds that undertaking a CL representation would not be a reasonable limitation of the scope of representation and would violate Rule 1.2. For example, if a CL client is a victim of domestic violence, is afraid that the other party is dishonest and would take 32 FAMILY ADVOCATE www.abanet.org/family/advocate Many practitioners use CL participation agreements to establish contractual obligations to “third persons,” namely the other lawyer and party advantage of the CL process, and/or cannot afford to hire litigation counsel in the event of termination of a CL process, it might be unreasonable for a lawyer to use CL. Although Rule 1.2 requires clients to provide informed consent to a limited-scope representation, such consent would be insufficient to authorize the representation if it would be found unreasonable under the circumstances. It can be difficult to assess the reasonableness of using CL and practitioners’ honest professional judgments may differ from later determinations by ethics committees or courts. Practitioners should avoid undertaking CL cases when it clearly would be unreasonable. On the other hand, ethics committees and courts should not chill lawyers’ reasonable efforts to help clients when it appears that CL might be appropriate considering the facts reasonably knowable at the time. The ethical rules suggest that CL lawyers should continue to assess the appropriateness of CL throughout a case. If continued use of the process becomes unreasonable at any time, CL lawyers may be required to reassess whether the representation is permissible and, if they conclude that it is no longer reasonable, terminate the representation. Consider the following scenario: the parties have invested substantial time and money in a CL process, the prospects for settlement are doubtful, and if the CL process continues without reaching agreement, one or both parties may be unable to afford litigation.
In another situation, at the outset of a CL case, the lawyers do not realize that a party has a serious substance abuse problem but, during the process, they discover the problem and the party refuses to get treatment and act cooperatively. In these situations, under Rule 1.2, lawyers would presumably be required to reassess the case and terminate representation if continuing would be unreasonable and/or harmful to clients. Impermissible conflicts of interest Rule 1.7 of the Model Rules of Professional Conduct requires CL lawyers to screen cases to avoid potential conflicts of interest and to obtain clients’ informed consent prior to initiating representation. Rule 1.7 provides, in part: (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:…(2) there is a significant risk that the representation of one or more clients will be materially limited by the lawyer’s responsibilities to…a third person.… (b) Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a lawyer may represent a client if: (1) the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client; …; and (4) each affected client gives informed consent, confirmed in writing. Comment 8 to Rule 1.7 states that “a conflict exists if there is a significant risk that a lawyer’s ability to consider, recommend or carry out an appropriate course of action for the client will be materially limited by the lawyer’s other responsibilities or interests.” The ABA ethics opinion is consistent with this analysis, stating that a “contractual obligation to withdraw creates on the part of each lawyer a ‘responsibility to a third party’ within the meaning of Rule 1.7(a)(2)” and concluding that “[r]esponsibilities to third parties constitute conflicts with one’s own client only if there is a significant risk that those responsibilities will materially limit the lawyer’s representation of the client.” Although the contractual structure of CL processes varies, many practitioners use CL participation agreements to establish contractual obligations to “third persons,” namely the other lawyer and party. Standard 7.1.A(1) of the International Academy of Collaborative Professionals’s (IACP) Ethical Standards for Collaborative Practitioners states that CL lawyers may not “knowingly withhold or misrepresent information material to the Collaborative process.” Virtually all CL participation agreements include similar provisions. The IACP standards do not define “material information,” but many participation agreements require disclosure of much more information than would legally be discoverable.
For example, the model participation agreement in Pauline Tesler’s book, Collaborative Law: Achieving Effective Resolution in Divorce Without Litigation (ABA Family Law Section, 2d ed. 2008), includes a provision committing lawyers and parties to “honesty and the full disclosure of all relevant information.” Tesler argues that a CL process must be “transparent,” which includes “honesty and candor about what one is doing and why one is doing it” and “candor about goals, priorities, and reasoning.”Thus, CL requires parties to disclose what Professor Carrie Menkel-Meadow calls “settlement facts” which: [M]ay not be legally relevant but which either go to the underlying needs, interests, and objectives of the parties — why they want what they want in a dispute — or such sensitive information as financial information, insurance coverage, trade secrets, future business plans that may affect the possible range of settlements or solutions but which would not necessarily be discoverable in litigation. Settlement facts are to be distinguished from “legal facts” (those which would be either discoverable or admissible in litigation). Carrie Menkel-Meadow, “Ethics in Alternative Dispute Resolution: New Issues, No Answers From The Adversary Conception of Lawyers’ Responsibilities,” 38 S. Texas Law Review 407 (1997). FALL 2010 33 A second obligation of lawyers under many CL participation agreements is to correct mistakes made by the other lawyer or party. For example, a party to a participation agreement (which sometimes include lawyers) may be required to inform the other side of any suspected numerical miscalculations or typographical errors, inaccurate factual assumptions, or reliance by that counsel on legal authorities that have been overruled or superseded. Third, by definition, lawyers are obliged to withdraw from a CL case if any party, including the opposing party, terminates the case. Thus, CL lawyers undertake obligations to third persons, and rule 1.7 requires lawyers to consider whether they can provide competent and diligent representation to their clients in a CL case. In some situations, CL lawyers would have an impermissible conflict of interest because they would not be able to provide competent and diligent representation.
The appropriateness factors listed in the preceding section would be relevant to this analysis. For example, if a lawyer represents a victim of domestic violence who seeks a divorce from her abuser, who has been proved to be untrustworthy and would likely seek to take advantage of a CL process, rule 1.7 would presumably prohibit the lawyer from representing the client in a CL process. In that situation, the victim’s lawyer would be caught in a conflict between protecting the client, who may be harmed by participating in CL, and complying with obligations under the CL participation agreement. For some vulnerable clients, merely participating in a process with an intimidating opponent may seriously undermine their ability to assert their interests. Abusers can send subtle signals to victims, which everyone else may miss, threatening the victims if he or she does not accede to the abuser’s demands. In such situations, lawyers might have difficulty in diligently representing their clients’ interests in negotiating an agreement with an unscrupulous adversary. Although it is possible that such lawyers could avoid an impermissible conflict of interest, it is a significant risk that lawyers should consider seriously. Rule 1.7 requires a lawyer to obtain a client’s informed consent before representing the client in a conflict-of-interest situation, though the client’s consent is not sufficient to authorize the representation if the lawyer cannot provide competent and diligent representation. If the concerns described above are reasonably addressed, however, CL lawyers can provide competent and diligent representation that fully meets ethical standards. Obtaining informed consent Rule 1.0(e) defines informed consent as “the agreement by a person to a proposed course of conduct after the lawyer has communicated adequate information and explanation about the material risks of and reasonably available alternatives to the proposed course of conduct.” Comment 6 to rule 1.0 states: The communication necessary to obtain such consent will vary according to the Rule involved and the circumstances giving rise to the need to obtain informed consent. The lawyer must make reasonable efforts to ensure that the client or other person possesses information reasonably adequate to make an informed decision. Ordinarily, this will require communication that includes a disclosure of the facts and circumstances giving rise to the situation, any explanation reasonably necessary to inform the client or other person of the material advantages and disadvantages of the proposed course of conduct and a discussion of the client’s or other person’s options and alternatives.
In determining whether the information and explanation provided are reasonably adequate, relevant factors include whether the client or other person is experienced in legal matters generally and in making decisions of the type involved, and whether the client or other person is independently represented by other counsel in giving the consent. The ethics opinions set high standards for informed consent in a CL process. For example, the Kentucky opinion states, “[B]ecause the relationship between the [CL] lawyer and the client is different from what would normally be expected, the lawyer has a heightened obligation to communicate with the client regarding the representation and the special implications of collaborative law process.…” This opinion states that CL lawyers must advise clients about a list of potential risks. The client must consent to the limited representation, which means he or she must be advised of the limited nature of the relationship and the implications of the arrangement. For example, obtaining new counsel will entail additional time and cost; the client may feel pressured to settle in order to avoid having to obtain new counsel; and the failure to reach a settlement, necessitating new counsel, is not within the exclusive control of the client—the opponent can effectively disqualify both counsel.
The client may be willing to assume these and other risks of the collaborative process but, as previously discussed, the lawyer must communicate sufficient information so that the 34 FAMILY ADVOCATE www.abanet.org/family/advocate A party to a participation agreement (which sometimes include lawyers) may be required to inform the other side of any suspected numerical miscalculations client has an adequate basis upon which to base such a decision. The New Jersey opinion also notes significant risks in CL, indicates that CL lawyers have a heightened duty of disclosure, and warns CL lawyers that they must provide clients with a reasonable analysis of the clients’ interests regarding possible use of CL, even if this conflicts with the lawyers’ interests in getting CL cases: [I]t is easy to imagine situations in which a lawyer who practices collaborative law would be naturally inclined to describe [the] risks and benefits to the client in a way that promotes the creation of the relationship, even if the client’s interests might be better served by a more traditional form of legal representation.… We are not prepared to conclude categorically at this juncture that lawyers who engage in collaborative law would be unable to deal with those conflicts honorably, or could not give the client the information necessary to decide whether to consent to the limitation. But informed consent regarding the limited scope of representation that applies in the collaborative law process is especially demanded, and the lawyer’s requirement of disclosure of the potential risks and consequences of failure is concomitantly heightened, because of the consequences of a failed process to the client, or, alternatively, the possibility that the parties could become “captives” to a process that does not suit their needs. The Kentucky opinion indicates that mere signing of a CL participation agreement is insufficient to constitute informed consent and that CL lawyers should discuss the process with clients and provide an opportunity for questions. Although the collaborative law agreement may touch on these matters [such as advantages and risks of different processes], it is unlikely that, standing alone, it is sufficient to meet the requirements of the rules relating to consultation and informed decision making. The agreement may serve as a starting point, but it should be amplified by a fuller explanation and an opportunity for the client to ask questions and discuss the matter. Those conversations must be tailored to the specific needs of the client and the circumstances of the particular representation. The Committee recommends that before having the client sign the collaborative agreement, the lawyer confirm in writing the lawyer’s explanation of the collaborative process and the client’s consent to its use. Thus the ethical opinions make clear that lawyers must engage in a thorough discussion with clients to comply with the obligation of obtaining informed consent. Conclusion Lawyers offering CL representation must comply with all ethical rules for lawyers generally. Under the rules governing a limited scope of representation and conflicts of interest, before undertaking a CL representation, lawyers must determine if the process is appropriate for a prospective client and obtain informed consent. Although the consent is normally in writing, lawyers do not comply with their duties if they obtain clients’ signatures without a careful discussion of the benefits and risks of CL and other dispute resolution options. By providing appropriate information before parties decide whether to use CL, lawyers can have greater confidence that parties will have realistic expectations, participate in the process more constructively, and be less likely to terminate a CL case. Although preventing all problems is impossible, compliance with these duties seems likely to prevent some, but certainly not all, complaints about CL (or any form of practice), as well as maximize competent client care. Clearly, complying with these ethical duties advances the interests of clients and lawyers. Not only are clients better protected, but also such compliance increases confidence in and use of CL, which is growing in consumer demand and acceptance by lawyers and judges.
John Lande is the Isidor Loeb Professor and Director of the LLM Program in Dispute Resolution at the University of Missouri School of Law. He is an award-winning writer who has written extensively about cooperative and collaborative processes. He may be reached at www.law.missouri.edu/lande/.
Forrest S. Mosten is a Certified Family Law Specialist in Los Angeles. He handles complex estates and high-conflict divorce matters and specializes in negotiating and drafting premarital and postmarital agreements. He serves as Adjunct Professor at UCLA School of Law, is the author of Collaborative Divorce Handbook (2009), and is the editor of Family Court Review’s special issue on collaborative law to be published in April 2011. He may be reached at www.mostenmediation.com.
This article is adapted from John Lande and Forrest S. Mosten, “Collaborative Lawyers’ Duties to Screen the Appropriateness of Collaborative Law and Obtain Clients’ Informed Consent to Use Collaborative Law,” 25 Ohio State Journal on Dispute Resolution 347 (2010). FALL 2010 35 The Kentucky opinion indicates that mere signing of a CL participation agreement is insufficient to constitute informed consent. Reprint with permission.