|
|
|
2008 Edition: Tennessee Rules of Professional Conduct Download Rules as a PDF | Return to Rules home page |
|||
|
CHAPTER 4
TRANSACTIONS WITH PERSONS OTHER THAN CLIENTS Rule 4.1 (a) In the course of representing a client, a lawyer shall not knowingly make a false statement of material fact or law to a third person. (b) If, in the course of representing a client in a non-adjudicative matter, a lawyer knows that the client intends to perpetrate a crime or fraud, the lawyer shall promptly advise the client to refrain from doing so and shall consult with the client about the consequences of the client’s conduct. If after such consultation, the lawyer knows that the client still intends to engage in the wrongful conduct, the lawyer shall: (1) withdraw from the representation of the client in the matter; and (2) give notice of the withdrawal to any person who the lawyer knows is aware of the lawyer’s representation of the client in the matter and whose financial or property interests are likely to be injured by the client’s criminal or fraudulent conduct. The lawyer shall also give notice to any such person of the lawyer’s disaffirmance of any written statements, opinions, or other material prepared by the lawyer on behalf of the client and which the lawyer reasonably believes may be used by the client in furtherance of the crime or fraud. (c) If a lawyer who is representing or has represented a client in a non-adjudicative matter comes to know, prior to the conclusion of the matter, that the client has, during the course of the lawyer’s representation of the client, perpetrated a crime or fraud, the lawyer shall promptly advise the client to rectify the crime or fraud and consult with the client about the consequences of the client’s failure to do so. If the client refuses or is unable to rectify the crime or fraud, the lawyer shall: (1) if currently representing the client in the matter, withdraw from the representation and give notice of the withdrawal to any person whom the lawyer knows is aware of the lawyer’s representation of the client in the matter and whose financial or property interests are likely to be injured by the client’s criminal or fraudulent conduct; and (2) give notice to any such person of the lawyer’s disaffirmance of any written statements, opinions, or other material prepared by the lawyer on behalf of the client and that the lawyer reasonably believes may be used by the client in furtherance of the crime or fraud. COMMENTS Misrepresentation [1] A lawyer is required to be truthful when dealing with others on a client’s behalf, but generally has no affirmative duty to inform an opposing party of relevant facts or law. A misrepresentation can occur if the lawyer incorporates or affirms a statement of another person that the lawyer knows is false. A misrepresentation can also occur by a failure to act. [2] This Rule refers to statements of fact. Whether a particular statement should be regarded as one of fact can depend on the circumstances. Under generally accepted conventions in negotiation, certain types of statements ordinarily are not taken as statements of material fact. Estimates of price or value placed on the subject of a transaction and a party’s intentions as to an acceptable settlement of a claim are in this category, as is the existence of an undisclosed principal except where nondisclosure of the principal would constitute fraud. Crime or Fraud by Client [3] Paragraphs (b) and (c) provide guidance for lawyers who discover that a client intends to or is engaging in criminal or fraudulent conduct, and in some cases may even have used the lawyer’s services to assist them commit the crime or fraud. To avoid assisting the client with the crime or fraud, the lawyer must advise the client to refrain from or to rectify the consequences of the criminal or fraudulent act. If the client refuses or is unable to do so, the lawyer must withdraw from the representation of the client in the matter. Additionally, this Rule mandates limited disclosures—notice of withdrawal or disaffirmance of written work product—in circumstances in which such disclosure is necessary for the lawyer to prevent the client from using the lawyer’s services in furtherance of the crime or fraud. To this limited extent, then, this Rule overrides the lawyer’s duties in Rules 1.6, 1.8(b), and 1.9(c) prohibiting disclosure or use to the disadvantage of the client of information relating to the representation. Other than the disclosure mandated by this Rule, however, the lawyer must not reveal information relating to the representation unless permitted to do so by Rule 1.6. [4] If a lawyer learns that a client intends to commit a crime or fraud under circumstances in which the lawyer will not assist the offense by remaining silent, paragraph (b) requires remonstration with the client against the crime or fraud and requires withdrawal if the client does not desist from the course of conduct in question. Although the lawyer is not required to reveal the client’s intended or ongoing fraud, the lawyer is required to communicate the fact that he or she has withdrawn from the representation of the client to any person who the lawyer reasonably believes knows of the lawyer’s involvement in the matter and whose financial or property interests are likely to be damaged by the client’s intended or ongoing misconduct. This communication is necessary to fully distance the lawyer from the client’s misconduct. If the client’s intended conduct is a crime, full disclosure of the crime is permitted by Rule 1.6(b), but such disclosure is not required by paragraph (b) of this Rule. [5] In some cases, a lawyer will learn about a client’s crime or fraud after he or she has innocently prepared and submitted statements, opinions, or other materials to third parties who will be adversely affected if the client persists with his or her misconduct. If the lawyer was misled by the client, some of these statements, opinions or materials may be false or misleading. Even though accurate, they may be necessary for the accomplishment of the client’s crime or fraud. This presents the lawyer with a dilemma. Without the consent of the client, the lawyer may not correct the statements, opinions, or materials. That would violate the prohibition against revealing information related to the representation of the client. Yet to do nothing would allow the client to use the lawyer’s work in the client’s ongoing effort to consummate the fraud. To resolve this dilemma, paragraphs (b) and (c) do not require disclosure of the crime or fraud but only requires that the lawyer effectively disengage from the crime or fraud by giving notice to affected persons of the lawyer’s disaffirmance of the lawyer’s work product that the lawyer reasonably believes may be used by the client in furtherance of the crime or fraud. See Rule 1.6(b) for the circumstances in which the lawyer is permitted to reveal information for the purposes of preventing the client’s crime or fraud. [6] This Rule does not apply if the lawyer learns of the client's crime or fraud after the lawyer's representation in the matter is concluded. In such circumstances, the lawyer must comply with Rules 1.6, 1.8(b), and 1.9(c) and may not make any disclosures concerning the client's crime or fraud unless permitted or required to do so by those Rules. See, e.g., RPC 1.6(b)(2) (permitting disclosures to secure legal advice about compliance with these Rules); RPC 1.6(b)(3) (permitting disclosures to establish a defense to an allegation of misconduct); RPC 1.6(c)(1) (requiring disclosure "to prevent reasonably certain death or substantial bodily harm"). DEFINITIONAL CROSS-REFERENCES "Consult" and "Consultation" See RPC 1.0(c) |
||
|
|||