Legal Ethics and Fair Debt Collection Litigation Daniel S. Blinn Consumer Law Group LLC-Rocky Hill, CT Some of these slides are based on a prior presentation by Daniel Blinn and Brian Bromberg.
Topics: 1. Taping telephone calls. 2. Representing multiple clients. 3. Questionable agreements with defendant. 4. Attorney Fee Issues 5. Advertising
Topic 1: Can we tape?
Maybe.
State Wiretap Laws State laws often prohibit only the interception of a communication, but in12 states, consent of both parties is required: California - Connecticut - Florida - Illinois - Massachusetts Maryland - Michigan - Montana - Nevada - New Hampshire - Pennsylvania - Washington
But if it s legal, it s ethical, right? GENERALLY NOT. ABA Opinion 337 (1974) held that recording without consent was conduct involving fraud, dishonesty or misrepresentation, which is prohibited by Rule 8. 4(a). The idea is that surreptitious taping by a lawyer is seen as deceptive by the public.
WELL, OK, BUT... In 2002, the ABA reversed itself and held that the mere act of secretly but lawfully recording a conversation inherently is not deceitful. Opinion 01-422
NOT SO FAST MAYBE NOT. Some states may still follow the older opinion: Attorneys should not electronically record a conversation with another party, without first informing that party that the conversation was being recorded. Texas Ethics Op. 514 (1996)
So can I just get my client to tape? AGAIN, GENERALLY NO. An attorney may not solicit the aid of his or her clients to undertake an action that the attorney is ethically prohibited from undertaking. Model Rule Prof. Conduct 8.4(a); Tex. Ethics Op. 514.
BUT: There are some exceptions when the taping is necessary to obtain evidence of illegal activity or to promote a social good. NY Formal Op. 2003-02 Mena v. Key Food Stores Co-op., Inc., 758 N.Y.S.2d 246, 247 (N.Y. Sup. Ct. 2003) (racial harassment claims; plaintiffs' attorney directed them to tape record manager who made racist remarks).
Waiver?
This call may be monitored or Recorded for Koala-T assurance...
Bottom line: research your own State s laws carefully. A good place to start your research is: Can We Tape? Article at The Reporters Committee for Freedom of the Press website: www.rcfp.org/taping/index.html
Topic 2: Representing Multiple Clients
REPRESENTING MULTIPLE CLIENTS Rule 1.7 Conflict Of Interest: Current Clients (a) Except as provided in paragraph (b), a lawyer shall not represent a client if the representation involves a concurrent conflict of interest.
Concurrent Conflict of Interest Multiple Clients with unrelated claims against the same defendant. Related clients with claims arising out of the same course of conduct. Conflict with attorney s own interests.
Rule 1.7 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 another client, a former client or a third person or by a personal interest of the lawyer.
What to Do?? Rule 1.7: A lawyer may represent a client if: the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client; AND each affected client gives informed consent, confirmed in writing.
I understand that you represent other consumers and that some of them may also have disputes with the same people or companies with whom I have a dispute. I understand that there is a potential that a conflict of interest could arise, and I consent to you representing me and other consumers at the same time.
Be Careful When Negotiating Aggregate Settlements
Rule 1.8(g) A lawyer who represents two or more clients shall not participate in making an aggregate settlement of the claims of or against the clients unless each client gives informed consent, in a writing signed by the client. The lawyer's disclosure shall include the existence and nature of all the claims involved and of the participation of each person in the settlement.
Topic 3: Controversial Agreements with Defendants.
What if defense counsel conditions settlement on your agreeing not to sue the defendant again on behalf of another plaintiff. If you don t currently have another plaintiff with an unfiled claim, are you even permitted to agree to this to get the deal done?
NO! Rule 5.6 Restrictions On Right To Practice A lawyer shall not participate in offering or making: (b) an agreement in which a restriction on the lawyer's right to practice is part of the settlement of a client controversy
So you refuse. But the lawyer still wants other agreements from you. Four examples are: 1. Agree not to use information learned during the case in any future representation against the opposing party. NO SAME REASON Rule 5.6(b)
2. Keep the terms of the settlement confidential: A. Individual clients ok if they consent. B. Class plaintiffs never.
Rule 1.2(a) A lawyer shall abide by a client's decision whether to settle a matter. Comment 1: client has ultimate authority on the objectives of representation.
Can a lawyer limit the client s ability to agree to confidentiality in a fee agreement?
Can a lawyer limit the client s ability to agree to confidentiality in a fee agreement? NO! or at least probably not
But Rule 1.2 provides that the parties can agree to limit the scope of the representation.
But Rule 1.2 provides that the parties can agree to limit the scope of the representation. Yes, but the comments say that the limitation must not violate the Rules.
The Rules as adopted by many states are even more explicit, providing that a lawyer may not enter into an agreement with the client that would limit the client s ability to settle a case that the lawyer might want to continue. E.g. CT, FL, GA, MA, MO, OK and TX.
What About Confidentiality Regarding the Dispute? MRPC 3.4(f): an attorney may not request a person other than a client to refrain from voluntarily giving relevant information to another party unless: (1) the person is a relative or an employee or other agent of a client; and (2) the lawyer reasonably believes that the person's interests will not be adversely affected by refraining from giving such information.
So, that s defense counsel s problem, right? Not so fast: Rule 8.4 prohibits an attorney from knowingly assisting another attorney in committing an ethical violation. Best course is to insist on getting an ethics ruling before communicating such an offer to the client.
Confidentiality of Materials Obtained in Discovery A. Trade secrets and the like B. Other information - Public policy may counsel your refusal to agree, but you can t jeopardize a settlement your client wants unless your client consents.
State Bars clarify. Attorney may not enter into settlement agreement that restricts attorney s right to practice law by prohibiting future representation of clients in cases where attorney might use information not protected as a confidence or secret under Code but nevertheless covered by terms of settlement agreement. NYS Bar Op. 730 Accord, DC Bar Op. 335 & LA County Bar Op. 512
ABA s Position Although a lawyer may participate in a settlement agreement that prohibits him from revealing information relating to the representation of his client, the lawyer may not participate or comply with a settlement agreement that would prevent him from using information gained during the representation in later representations against the opposing party, or a related party, except in limited circumstances. An agreement not to use information learned during the representation effectively would restrict the lawyer's right to practice and hence would violate Rule 5.6(b). Formal Opinion 00-417, Settlement Terms Limiting a Lawyer s Use of Information
Topic 4: Fee Agreements
ATTORNEY FEE ISSUES Rule 1.5: Communicate the fee agreement to the client, preferably in writing, before or within a reasonable time after commencing the representation. Contingent fee agreements must be signed by the client. Contingent fee agreements must explain how the fee will be calculated.
HYBRID AGREEMENTS: contingent fee agreements between counsel and client are valid in cases where statutory fees are available. Venegas v. Mitchell, 495 U.S. 82, 86-89 (1990). Fee must still be reasonable.
Is it ok to provide that the attorney shall receive the greater of her hourly rate or the contingent fee amount? Or that it s at the attorney s option? Does the possibility that an attorney fee award is taxable affect reasonableness? It s not a listed factor in the ABA Rule
Suggestion: include a provision that explains the purpose of fee shifting statutes and that the attorney fees may exceed the recovery available to the client. Explain in the fee agreement that you are not providing any tax advice to the client.
Simultaneous negotiation of damages and attorney fees. Permissible. Evans v. Jeff D., 475 U.S. 717 (1986). Is it desirable? In class cases? In individual cases?
Liability for Costs and Expenses Query: Can plaintiff s counsel advance all the costs and expenses of litigation and agree to recover those costs and expenses only if the suit is successful? Related Query: What about in a class action?
Must Clients Be Responsible for Costs? It Depends The contemporary view, as reflected in Rule 1.8(e) of the ABA s Model Rules of Professional Conduct, is that counsel can not only advance costs, but may do so with the expectation that counsel will cover the costs even if the suit is unsuccessful. Some states still follow older rule, which required that clients be ultimately responsible for the costs.
Two Questions for Consideration First, is it a good idea to agree to cover the costs of an unsuccessful lawsuit? On the one hand, does an agreement to eat the costs strip the client of the sense of involvement in the case? On the other hand, does a clause requiring the client to eat the costs create undue fear in the client?
Advertising Clients Wanted
Advertisements Nonmisleading attorney advertisements are entitled to First Amendment protection. Bates v. Arizona State Bar, 433 U.S. 412 (1978) Rule 7.2 contains substantial requirements and limitations. In-person solicitations are subject to state regulations because they are inherently conducive to... misconduct. Ohralik v. Ohio State Bar Ass n, 436 U.S. 447 (1978). But see In re Primus, 436 U.S. 412 (1978), below.
Permitted Solicitations Rule 7.2 A lawyer shall not initiate personal or live telephone contact, including telemarketing contact, with a prospective client for the purpose of obtaining professional employment... Primary exceptions are for close friends, relatives, and former clients
Another Exception Solicitation of prospective litigants by nonprofit organizations that engage in litigation as a form of political expression and political association constitutes expressive and associational conduct entitled to First Amendment protection as to which government may regulate only with narrow specificity. In re Primus, 436 U.S. 412 (1978) (ACLU). In other words, some not-for-profit organizations (like the ACLU) can do things that private for-profit attorneys are not allowed to do. But if you work for a not-for-profit, do not blindly rely on In re Primus.
Written Communications to Prospective Clients
Written Communications to Prospective Clients Rule 7.3(b): Prohibits written solicitations that are misleading or coercive or that are directed to prospective clients who are particularly vulnerable, are represented, or who do not wish to receive solicitations
Requirements for Written Communications Clearly and prominently labeled Advertising Material in red ink on the first page of the communication and the lower left corner of the envelope. The first sentence of any written communication shall be: If you have already retained a lawyer for this matter, please disregard this letter. Advertising Material
Recent Developments Prohibitions on the use of trade names may be unconstitutional. See Alexander v. Cahill, 598 F.3d 79 (2d Cir. 2010), cert denied, U.S., 131 S.Ct. 820 (2010). Prohibitions on the use of colorful descriptive monikers, such as Heavy Hitters, or prohibitions on selling pop-up ads on attorney websites may also be unconstitutional. Id.
Recent Developments II Prohibitions on the use of testimonials or endorsements from a client with respect to a matter that is still pending may be unconstitutional. Id. Rules establishing 30-day moratoriums on attorney advertising soliciting accident victims or their families are constitutional. Id.
Recent Developments III Prohibitions on the use of the term certified specialist may be unconstitutional. See Hayes v. New York Attorney Greivance Committee of the Eighth Judicial District, 672 F.3d 158 (2d Cir. 2011).
Final Tips: Check Your State s Rules for Variations For example, check for prohibitions on the use of trade names or certain symbols (e.g., scales of justice, courthouse, etc.) Check for record-keeping requirements (e.g., New York requires attorneys to file templates of solicitation letters with the bar, together with mailing lists of those to whom the letter was sent).
More Final Tips: Check for prohibitions on making certain representations: for example, many states restrict the use of the word specialize in those states, use the words focus or concentrate instead. If in doubt, call an ethics hotline or request a formal opinion from a bar association.
Even More Final Tips Consider bringing a constitutional challenge in federal court. Consider bringing a mandamus proceeding if the state authorities refuse to follow federal court precedent. In sum, don t violate the ethics rules and then wait until you re facing disciplinary proceedings to argue your position. Take affirmative steps beforehand.