Wednesday, April 29, 2020

High Probabilities And Client Fraud

Ethical obligations when an attorney is faced with possible fraud by a current or prospective client are discussed in an opinion released today by the American Bar Association

Model Rule 1.2(d) prohibits a lawyer from advising or assisting a client in conduct the lawyer “knows” is criminal or fraudulent. That knowledge may be inferred from the circumstances, including a lawyer’s willful blindness to or conscious avoidance of facts. Accordingly, where facts known to the lawyer establish a high probability that a client seeks to use the lawyer’s services for criminal or fraudulent activity, the lawyer has a duty to inquire further to avoid advising or assisting such activity. Even if information learned in the course of a preliminary interview or during a representation is insufficient to establish “knowledge” under Rule 1.2(d), other rules may require the lawyer to inquire further in order to help the client avoid crime or fraud, to avoid professional misconduct, and to advance the client’s legitimate interests. These include the duties of competence, diligence, communication, and honesty under Rules 1.1, 1.3, 1.4, 1.13, 1.16, and 8.4. If the client or prospective client refuses to provide information necessary to assess the legality of the proposed transaction, the lawyer must ordinarily decline the representation or withdraw under Rule 1.16. A lawyer’s reasonable evaluation after inquiry and based on information reasonably available at the time does not violate the rules. This opinion does not address the application of these rules in the representation of a client or prospective client who requests legal services in connection with litigation.

From the conclusion

A lawyer’s reasonable evaluation after that inquiry based on information reasonably available at the time does not violate the rules.

(Mike Frisch)

https://lawprofessors.typepad.com/legal_profession/2020/04/high-probabilities-and-client-fraud-.html

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