At this time, there are no disciplinary cases from the California State Bar regarding Rule 1.18, but prior to the entry into force of the new Professional Professional Responsibilities Code, the U.S. District Court, Central District of California, applied the rule in SkyBell Technologies, Inc. v. Ring, Inc., No. 18-cv-14 (C.D. Cal September 18, 2018). These lenient conflict-of-laws rules, in the words of Commentary 3 and 4, recognize that “a lawyer representing a client in the circumstances covered by this rule is usually unable to systematically identify conflicts of interest” and that “the limited nature of the services increases the risk of conflicts of interest with other matters handled by the law firm, significantly reduced”. Rule 6.5 also recognizes that customers who use these programs often cannot wait for conflict checks. The new regulation therefore serves both lawyers and clients. According to this “significantly prejudicial” test, a potential customer seeking protection under Rule 1.18 “does not have to prove that the damage will occur with certainty to prove a conflict”. Instead, the rule focuses on information that “could be significantly harmful.” One of the new ABA rules deals with conflicts of interest arising from a lawyer`s preliminary discussion with a potential client who decides not to hire the lawyer. Under the New York Code of Professional Liability and case law, these clients are considered full-fledged former clients who are entitled to the full protection of the Code. Therefore, under New York DR Section 5-108(A), a lawyer who has interviewed or consulted with a potential client has a complete duty of confidentiality to that person and cannot object to that person in a materially related matter without the person`s consent.
[Editor`s note: Rule 1.9, referred to in Rule 1.18(b) above, reads as follows:] It may not be possible to prevent a potential customer from hearing significantly harmful information. One possible solution to this risk is to request a waiver of actual or potential conflicts. Rule 1.18 provides for two types of derogations. The one dealt with in Rule 1.18(d)(1) and commentary [7] comes into play only after a real conflict has arisen between a client and a potential client, that is, after the lawyer has followed the path with a potential client, without knowing that there is a client with unfavourable interests. This is analogous to waiver in the event of a conflict between a current and former customer according to DR 5-108. Since dr. 5-108 has been the subject of many comments, we will not return to it here. However, we note that the proposed version of Model Rule 1.18, which is consistent with New York law, does not require written exemptions in such circumstances. Verbal waivers are permitted under Article 1.18 if they are subsequently confirmed in writing.
(DR 5-108 does not require written confirmation on its terms.) The opinion cites an example from the reformulation of the law (third): the lawyers` law, to illustrate this point. A lawyer meets with a potential client for an hour about why the potential client filed the divorce and the property interests of the potential client and their spouse. If the potential client does not hire the lawyer, then the lawyer cannot represent the opposing spouse because the lawyer has acquired “significantly prejudicial information” within the meaning of Rule 1.18. Rule 1.18 does not state this explicitly, but it does divide potential clients into two categories – those who choose not to enter into an attorney-client relationship with the lawyer (I will call them “former potential clients”) and those who still decide to hire the lawyer or wait for the law firm to decide to take over their case (I will call them “active potential clients”). An active potential client is essentially a current client, and a lawyer should not oppose a current client in any matter. Even in the absence of such an agreement, Rule 1.18(c) does not prohibit a lawyer from opposing a potential former client in a materially related matter, unless “the lawyer has received information from the potential client that could cause significant harm to that person in the matter.” If the lawyer has not received any information that could be significantly detrimental to the potential former client, the lawyer may also object to the potential former client in a substantially related case. Commentary 6 states: “Counsel is not prohibited from representing a client with interests contrary to those of the potential client in the same or substantially related matter, unless the lawyer has received information from the potential client that could be significantly harmful when used in the case. Rule 1.18(b) states that a lawyer has a duty of confidentiality to a potential client by including section 6068(e) and rule 1.6 of the Business and Professional Code, but adding the limitation of rule 1.19. Section 6068(e) of the Business and Professional Code establishes a lawyer`s duty of confidentiality to a client, and Rule 1.6 recommends that a lawyer may disclose confidential information with the informed consent of a client or if a lawyer has reasonable grounds to believe that disclosure of such confidential information is necessary to prevent a criminal act that could result in death or significant bodily harm.
The inclusion of Rule 1.9 requires a lawyer to consider the interests of a former client when considering hiring a potential client. Therefore, the application of Rule 1.9 would prohibit a lawyer from performing a representation that is the same without the written consent of the potential client or that is essentially related to a consultation with a potential client. At its semi-annual meeting in February 2002, the American Bar Association (ABA) adopted three brand new rules of ethics that have now been formally incorporated into the ABA Model Rules of Professional Conduct. New York attorneys should take care of these new rules because each rule reflects a situation that has not been sufficiently covered by the ABA Model Rules and, more importantly to our readers, is not sufficiently covered by the New York Code of Professional Liability. This article describes the new rules and the situations they handle. The full text of the new regulation is reproduced below. However, Rule 1.18(c) provides that a lawyer is prohibited from accepting a new client whose interests are materially contrary to those of a potential former client in a matter that is identical or substantially related to consulting the potential former client. This prohibition applies if the lawyer had already received information from a potential client that could be “seriously harmful” to the potential client.
Disqualification under Rule 1.18 is triggered when the information provided by the potential customer has the potential to be “significantly harmful” if subsequently used against the potential customer. The term “significantly injurious” has not been examined by the case law and is likely to be defined on a case-by-case basis. But it doesn`t take a big leap of imagination to predict what information can be considered “significantly harmful”: information that, when revealed to the adversary, carries the risk of influencing the issue in question. This is consistent with existing New York law, which requires disqualification for the disclosure of information that includes “material matters related to the action” and that has been “made confidential” to facilitate the provision of legal services. [Seeley v. Seeley, 514 N.Y.S.2d 110, 112 (2d Dept. 1987); see also Leisman v. Leisman, 617 N.Y.S.2d 807 (2d Dept.
1994), disqualification for possession of information “which may have a substantial connection to this dispute and which would be subject to solicitor-client privilege”.] The notice also explains that courts or disciplinary authorities may benefit from a document review or hearing to assess the credibility of the lawyer and potential client who invoke the protection provided in Rule 1.18. Although Rule 1.18 was not yet in force, the court applied the rule and sided with SkyBell and disqualified the law firm due to the conflict of interest between a current client (Ring) and a potential client (SkyBell) in the same matter, without obtaining informed consent in accordance with the requirements of 1.18(d). SkyBell Technologies is the first case to apply and interpret Rule 1.18. The decision is controversial because it interpreted the rule as requiring specific consent, while the wording of Rule 1.18(d)(2)(i-ii) does not require the specific consent of the potential client. Rather, it requires that the attorney who received the potential client`s confidential information be protected and not receive any portion of the current client`s fees AND that written notice was provided to the potential client, which, in this case, made both. .