N.M. R. Prof'l. Cond. 16-106
N.M. R. Prof'l. Cond. 16-106
Committee commentary. -
[1] The New Mexico Supreme Court Code of Professional Conduct Committee considered the circumstances where an insurer, having retained a defense lawyer to represent an insured, imposes a requirement that the lawyer's bills be submitted to a third-party auditor for review, approval, and payment. Billing statements may contain information that is covered by the work product doctrine and attorney-client privilege. The committee believes that a lawyer can legitimately disclose billing information but when the information involves work product or attorney-client privileged information, such information should not be disclosed to a third-party auditor unless informed consent is first obtained from the insured or unless the lawyer is otherwise ordered by a court to produce the billing information.
[2] As of November 7, 1999, this opinion is in accord with the ethics committee opinions of Alabama, Alaska, District of Columbia, Florida, Hawaii, Indiana, Kentucky, Louisiana, Maryland, Massachusetts, Mississippi, Missouri, New York, North Carolina, Oregon, Pennsylvania, South Carolina, Tennessee, Utah, Vermont, Virginia, and Washington. Only Nebraska's Ethics Advisory Committee has taken a contrary view but nevertheless recommends that lawyers should prepare bills carefully to protect against undue disclosures.
[3] This rule governs the disclosure by a lawyer of information relating to the representation of a client during the lawyer's representation of the client. See Rule 16-118 NMRA for the lawyer's duties with respect to information provided to the lawyer by a prospective client, Rule 16-109(C)(2) NMRA for the lawyer's duty not to reveal information relating to the lawyer's prior representation of a former client, and Rules 16-108(B) and 16-109(C)(1) NMRA for the lawyer's duties with respect to the use of such information to the disadvantage of clients and former clients.
[4] A fundamental principle in the client-lawyer relationship is that, in the absence of the client's informed consent, the lawyer must not reveal information relating to the representation. See Rule 16-100(E) NMRA for the definition of "informed consent." This contributes to the trust that is the hallmark of the client-lawyer relationship. The client is thereby encouraged to seek legal assistance and to communicate fully and frankly with the lawyer even as to embarrassing or legally damaging subject matter. The lawyer needs this information to represent the client effectively and, if necessary, to advise the client to refrain from wrongful conduct. Almost without exception, clients come to lawyers in order to determine their rights and what is, in the complex of laws and regulations, deemed to be legal and correct. Based upon experience, lawyers know that almost all clients follow the advice given, and the law is upheld.
[5] The principle of client-lawyer confidentiality is given effect by related bodies of law: the attorney-client privilege, the work product doctrine, and the rule of confidentiality established in professional ethics. The attorney-client privilege and work product doctrine apply in judicial and other proceedings in which a lawyer may be called as a witness or otherwise required to produce evidence concerning a client. The rule of client-lawyer confidentiality applies in situations other than those where evidence is sought from the lawyer through compulsion of law. The confidentiality rule, for example, applies not only to matters communicated in confidence by the client but also to all information relating to the representation, whatever its source. A lawyer may not disclose such information except as authorized or required by the Rules of Professional Conduct or other law. See Scope of the Rules of Professional Conduct.
[6] Paragraph A prohibits a lawyer from revealing information relating to the representation of a client. This prohibition also applies to disclosures by a lawyer that do not in themselves reveal protected information but could reasonably lead to the discovery of such information by a third person. A lawyer's use of a hypothetical to discuss issues relating to the representation is permissible so long as there is no reasonable likelihood that the audience, recipient, listener, or viewer will be able to ascertain the identity of the client or the situation involved. Social media communications and communications made on a lawyer's website or blog must comply with this rule.
Authorized Disclosure
[7] Except to the extent that the client's instructions or special circumstances limit that authority, a lawyer is impliedly authorized to make disclosures about a client when appropriate in carrying out the representation. In some situations, for example, a lawyer may be impliedly authorized to admit a fact that cannot properly be disputed or to make a disclosure that facilitates a satisfactory conclusion to a matter. Lawyers in a firm may, in the course of the firm's practice, disclose to each other information relating to a client of the firm, unless the client has instructed that particular information be confined to specified lawyers.
Disclosure Adverse to Client
[8] Although the public interest is usually best served by a strict rule requiring lawyers to preserve the confidentiality of information relating to the representation of their clients, the confidentiality rule is subject to limited exceptions. Paragraph (B)(1) recognizes the overriding value of life and physical integrity and permits disclosure reasonably necessary to prevent reasonably certain death or substantial bodily harm. Such harm is reasonably certain to occur if it will be suffered imminently or if there is a present and substantial threat that a person will suffer such harm at a later date if the lawyer fails to take action necessary to eliminate the threat. Thus, a lawyer who knows that a client has accidentally discharged toxic waste into a town's water supply may reveal this information to the authorities if there is a present and substantial risk that a person who drinks the water will contract a life-threatening or debilitating disease and the lawyer's disclosure is necessary to eliminate the threat or reduce the number of victims.
[9] Paragraph (B)(2) is a limited exception to the rule of confidentiality that permits the lawyer to reveal information to the extent necessary to enable affected persons or appropriate authorities to prevent the client from committing a crime or fraud, as defined in Rule 16-100(D) NMRA, that is reasonably certain to result in substantial injury to the financial or property interests of another and in furtherance of which the client has used or is using the lawyer's services. Such a serious abuse of the client-lawyer relationship by the client forfeits the protection of this rule. The client can, of course, prevent such disclosure by refraining from the wrongful conduct. Although Paragraph (B)(2) does not require the lawyer to reveal the client's misconduct, the lawyer may not counsel or assist the client in conduct the lawyer knows is criminal or fraudulent. See Rule 16-102(B) NMRA. See also Rule 16-116 NMRA with respect to the lawyer's obligation or right to withdraw from the representation of the client in such circumstances, and Rule 16-113(C) NMRA, which permits the lawyer, where the client is an organization, to reveal information relating to the representation in limited circumstances.
[10] Paragraph (B)(3) addresses the situation in which the lawyer does not learn of the client's crime or fraud until after it has been consummated. Although the client no longer has the option of preventing disclosure by refraining from the wrongful conduct, there will be situations in which the loss suffered by the affected person can be prevented, rectified, or mitigated. In such situations, the lawyer may disclose information relating to the representation to the extent necessary to enable the affected persons to prevent or mitigate reasonably certain losses or to attempt to recoup their losses. Paragraph (B)(3) does not apply when a person who has committed a crime or fraud thereafter employs a lawyer for representation concerning that offense.
[11] A lawyer's confidentiality obligations do not preclude a lawyer from securing confidential legal advice about the lawyer's personal responsibility to comply with these rules. In most situations, disclosing information to secure such advice will be impliedly authorized for the lawyer to carry out the representation. Even when the disclosure is not impliedly authorized, Paragraph (B)(4) permits such disclosure because of the importance of a lawyer's compliance with the Rules of Professional Conduct.
[12] Where a legal claim or disciplinary charge alleges complicity of the lawyer in a client's conduct or other misconduct of the lawyer involving representation of the client, the lawyer may respond to the extent the lawyer reasonably believes necessary to establish a defense. The same is true with respect to a claim involving the conduct or representation of a former client. Such a charge can arise in a civil, criminal, disciplinary, or other proceeding and can be based on a wrong allegedly committed by the lawyer against the client or on a wrong alleged by a third person, for example, a person claiming to have been defrauded by the lawyer and client acting together. The lawyer's right to respond arises when an assertion of such complicity has been made. Paragraph (B)(5) does not require the lawyer to await the commencement of an action or proceeding that charges such complicity, so that the defense may be established by responding directly to a third party who has made such an assertion. The right to defend also applies, of course, where a proceeding has been commenced.
[13] A lawyer entitled to a fee is permitted by Paragraph (B)(5) to prove the services rendered in an action to collect it. This aspect of the rule expresses the principle that the beneficiary of a fiduciary relationship may not exploit it to the detriment of the fiduciary.
[14] Other law may require that a lawyer disclose information about a client. Whether such a law supersedes Rule 16-106 NMRA is a question of law beyond the scope of these rules. When disclosure of information relating to the representation appears to be required by other law, the lawyer must discuss the matter with the client to the extent required by Rule 16-104 NMRA. If, however, the other law supersedes this rule and requires disclosure, Paragraph (B)(6) permits the lawyer to make such disclosures as are necessary to comply with the law.
Detection of Conflicts of Interest
[15] Paragraph (B)(7) recognizes that lawyers in different firms may need to disclose limited information to each other to detect and resolve conflicts of interest, such as when a lawyer is considering an association with another firm, two or more firms are considering a merger, or a lawyer is considering the purchase of a law practice. See Rule 16-117 NMRA, Comment [7]. Under these circumstances, lawyers and law firms are permitted to disclose limited information, but only once substantive discussions regarding the new relationship have occurred. Any such disclosure should ordinarily include no more than the identity of the persons and entities involved in a matter, a brief summary of the general issues involved, and information about whether the matter has terminated. Even this limited information, however, should be disclosed only to the extent reasonably necessary to detect and resolve conflicts of interest that might arise from the possible new relationship. Moreover, the disclosure of any information is prohibited if it would compromise the attorney-client privilege or otherwise prejudice the client (e.g., the fact that a corporate client is seeking advice on a corporate takeover that has not been publicly announced; that a person has consulted a lawyer about the possibility of divorce before the person's intentions are known to the person's spouse; or that a person has consulted a lawyer about a criminal investigation that has not led to a public charge). Under those circumstances, Paragraph A prohibits disclosure unless the client or former client gives informed consent. A lawyer's fiduciary duty to the lawyer's firm may also govern a lawyer's conduct when exploring an association with another firm and is beyond the scope of these rules.
[16] Any information disclosed pursuant to Paragraph (B)(7) may be used or further disclosed only to the extent necessary to detect and resolve conflicts of interest. Paragraph (B)(7) does not restrict the use of information acquired by means independent of any disclosure pursuant to Paragraph (B)(7). Paragraph (B)(7) also does not affect the disclosure of information within a law firm when the disclosure is otherwise authorized, see Comment [7], such as when a lawyer in a firm discloses information to another lawyer in the same firm to detect and resolve conflicts of interest that could arise in connection with undertaking a new representation.
[17] A lawyer may be ordered to reveal information relating to the representation of a client by a court or by another tribunal or governmental entity claiming authority pursuant to other law to compel the disclosure. Absent informed consent of the client to do otherwise, the lawyer should assert on behalf of the client all non-frivolous claims that the order is not authorized by other law or that the information sought is protected against disclosure by the attorney-client privilege or other applicable law. In the event of an adverse ruling, the lawyer must consult with the client about the possibility of appeal to the extent required by Rule 16-104 NMRA. Unless review is sought, however, Paragraph (B)(6) permits the lawyer to comply with the court's order.
[18] Paragraph B permits disclosure only to the extent the lawyer reasonably believes the disclosure is necessary to accomplish one of the purposes specified. Where practicable, the lawyer should first seek to persuade the client to take suitable action to obviate the need for disclosure. In any case, a disclosure adverse to the client's interest should be no greater than the lawyer reasonably believes necessary to accomplish the purpose. If the disclosure will be made in connection with a judicial proceeding, the disclosure should be made in a manner that limits access to the information to the tribunal or other persons having a need to know it and appropriate protective orders or other arrangements should be sought by the lawyer to the fullest extent practicable.
[19] Paragraph B permits but does not require the disclosure of information relating to a client's representation to accomplish the purposes specified in Paragraphs (B)(1)-(B)(6). In exercising the discretion conferred by this rule, the lawyer may consider such factors as the nature of the lawyer's relationship with the client and with those who might be injured by the client, the lawyer's own involvement in the transaction, and factors that may extenuate the conduct in question. A lawyer's decision not to disclose as permitted by Paragraph B does not violate this rule. Disclosure may be required, however, by other rules. Some rules require disclosure only if such disclosure would be permitted by Paragraph B. See Rules 16-102(D), 16-401(B), 16-801, and 16-803 NMRA. Rule 16-303 NMRA, on the other hand, requires disclosure in some circumstances regardless of whether such disclosure is permitted by this rule. See Rule 16-303(C) NMRA.
Acting Competently to Preserve Confidentiality
[20] Paragraph C requires a lawyer to act competently to safeguard information relating to the representation of a client against unauthorized access by third parties and against inadvertent or unauthorized disclosure by the lawyer or other persons who are participating in the representation of the client or who are subject to the lawyer's supervision. See Rules 16-101, 16-501, and 16-503 NMRA. The unauthorized access to, or the inadvertent or unauthorized disclosure of, information relating to the representation of a client does not constitute a violation of Paragraph C if the lawyer has made reasonable efforts to prevent the access or disclosure. Factors to be considered in determining the reasonableness of the lawyer's efforts include, but are not limited to, the sensitivity of the information, the likelihood of disclosure if additional safeguards are not employed, the cost of employing additional safeguards, the difficulty of implementing the safeguards, and the extent to which the safeguards adversely affect the lawyer's ability to represent clients (e.g., by making a device or important piece of software excessively difficult to use). A client may require the lawyer to implement special security measures not required by this rule or may give informed consent to forgo security measures that would otherwise be required by this rule. Whether a lawyer may be required to take additional steps to safeguard a client's information in order to comply with other law, such as state and federal laws that govern data privacy or that impose notification requirements upon the loss of, or unauthorized access to, electronic information, is beyond the scope of these rules.
[21] When transmitting a communication that includes information relating to the representation of a client, the lawyer must take reasonable precautions to prevent the information from coming into the hands of unintended recipients. This duty, however, does not require that the lawyer use special security measures if the method of communication affords a reasonable expectation of privacy. Special circumstances, however, may warrant special precautions. Factors to be considered in determining the reasonableness of the lawyer's expectation of confidentiality include the sensitivity of the information and the extent to which the privacy of the communication is protected by law or by a confidentiality agreement. A client may require the lawyer to implement special security measures not required by this rule or may give informed consent to the use of a means of communication that would otherwise be prohibited by this rule. Whether a lawyer may be required to take additional steps in order to comply with other law, such as state and federal laws that govern data privacy, is beyond the scope of these rules.
Former Client
[22] The duty of confidentiality continues after the client-lawyer relationship has terminated. See Rule 16-109(C)(2) NMRA. See Rule 16-109(C)(1) NMRA for the prohibition against using such information to the disadvantage of the former client.
[Adopted by Supreme Court Order No. 08-8300-029, effective November 3, 2008; as amended by Supreme Court Order No. 13-8300-038, effective December 31, 2013; as amended by Supreme Court Order No. 17-8300-018, effective December 31, 2017.]
.ANNOTATIONS The 2017 amendment, approved by Supreme Court Order No. 17-8300-018, effective December 31, 2017, revised the committee commentary to clarify that social media communications and communications made on a lawyer's website or blog must comply with this rule. The 2013 amendment, approved by Supreme Court Order No. 13-8300-038, effective December 31, 2013, permitted lawyers to disclose limited information to detect and resolve conflicts of interest; required lawyers to make reasonable efforts to prevent the inadvertent and unauthorized disclosure of information; added Subparagraph (7) of Paragraph B; and added Paragraph C. The 2008 amendment, approved by Supreme Court Order No. 08-8300-29, effective November 3, 2008, in Paragraph A, changed "consents after consultation, except for disclosures that are" to "gives informed consent, the disclosure is" and changed "except as stated in Paragraphs B, C and D" to "or the disclosure is permitted by Paragraph B of this rule"; in Paragraph B, in the title, deleted "to prevent harm to others" and added "specific circumstances"; deleted the former rule which provided for disclosure of information to prevent imminent death or substantial bodily harm and added the prefatory sentence and Subparagraphs (1) through (6); deleted former Paragraph C which provided for disclosure of information to prevent financial or property harm; and deleted former Paragraph D which provided for disclosure of information in a lawyer-client controversy.
For privileged communication between attorney and client, see 38-6-6 NMSA 1978. When duty of confidentiality attaches. - The duty of confidentiality under this rule may attach when the lawyer agrees to consider whether a client-lawyer relationship shall be established. In re Lichtenberg, 1994-NMSC-034, 117 N.M. 325, 871 P.2d 981. Revealing client confidences. - Where respondent successfully defended a client against charges of incest, criminal sexual contact, and criminal sexual penetration of his granddaughter, and where, in a subsequent petition for an accounting, application for a temporary restraining order, and motion for a preliminary injunction, respondent revealed that his client had told him that client had engaged in sexual intercourse with his granddaughter, both by force and consensually, that client had been having sex with multiple under-aged girls since 1966, and that he had sex with other under-aged female family members, there was sufficient evidence to support a conclusion that respondent disclosed the sensitive information for an improper purpose, that the disclosure was not necessary to prevent his client from committing a crime or fraud, and that the disclosure was neither relevant nor material to a fee dispute. In re Venie, 2017-NMSC-018. "Substantial relationship" test, as applied to one's former attorney in prior litigation serving as counsel for one's opponent in present litigation, requires a three-tiered analysis: (1) A factual reconstruction of the scope of the prior legal representation; (2) a determination of whether it is reasonable to presume that the lawyer would have received confidential information of the type alleged by his former client; and (3) a determination of whether the alleged confidential information is relevant to the issues raised in the litigation pending against the former client. Leon, Ltd. v. Carver, 1986-NMSC-015, 104 N.M. 29, 715 P.2d 1080 (decided under former rules). Substantial relationship standard requires disqualification if an attorney represents a party in a matter in which the adverse party is that attorney's former client, and the subject matter of the two representations are substantially related. United Nuclear Corp. v. General Atomic Co., 1980-NMSC-094, 96 N.M. 155, 629 P.2d 231 appeal dismissed; 451 U.S. 901, 101 S. Ct. 1966, 68 L. Ed. 2d 289 (1981) (decided under former rules). Law reviews. - For article, "Attorney as Interpreter: A Return to Babble," 20 N.M.L. Rev. 1 (1990). Am. Jur. 2d, A.L.R. and C.J.S. references. - 7 Am. Jur. 2d Attorneys at Law §§ 119, 120. Propriety of attorney who has represented corporation acting for corporation in controversy with officer, director, or stockholder, 1 A.L.R.4th 1124. Applicability of attorney-client privilege to evidence or testimony in subsequent action between parties originally represented contemporaneously by same attorney, with reference to communication to or from one party, 4 A.L.R.4th 765. Applicability of attorney-client privilege to communications made in presence of or solely to or by third person, 14 A.L.R.4th 594. Attorney-client privilege as extending to communications relating to contemplated civil fraud, 31 A.L.R.4th 458. Attorney's work product privilege, under Rule 26(b)(3) of the Federal Rules of Civil Procedure, as applicable to documents prepared in anticipation of terminated litigation, 41 A.L.R. Fed. 123. Propriety of law firm's representation of client in federal court where lawyer affiliated with firm is disqualified from representing client, 51 A.L.R. Fed. 678. Attorney-client privilege and the reporting of cash transactions in excess of $10,000, as required by § 6050I of Internal Revenue Code (26 USCA § 6050I), 152 A.L.R. Fed. 459. 7A C.J.S. Attorney and Client §§ 234, 237.