§6.2 Scope of the Ethical Duty of Confidentiality

• Jurisdiction: Washington

II. Scope of the Ethical Duty of Confidentiality

Most of the discussion relating to the scope of the duty of confidentiality nicely fits into consideration of the various exceptions. But there are several threshold issues that need to be examined.

A. Threshold Issues

Before we consider the various exceptions to the lawyer's duty of confidentiality, we address the duration of the duty following termination of representation or the death of the client and the question of disclosure versus use of client confidences.

1. Duration of the Duty

It is clear that the duty of confidentiality continues after the representation of a client has been terminated. RPC 1.9(c)(2) prohibits a lawyer from revealing confidences of a former client "except as these Rules would permit or require with respect to a client." There is no general exception permitting disclosure of confidences of a former client, although former client consent or one of the other bases for disclosure might apply. As already noted, RPC 1.9(c)(1) states that confidences of a former client may be used by the lawyer if they have become "generally known." Although the rule does not specifically authorize "disclosure" as opposed to "use" of information that has become "generally known," it is hard to see why a distinction of this sort would be drawn.

It is also clear that the ethical duty survives the death of a client.³⁰ This problem usually arises in the context of the duration of the attorney-client privilege, which also survives death.³¹ Whether and under what circumstances a lawyer may disclose client confidences after the death of a client is discussed in Section II.B.1.a., below, under the topic of "authorized disclosure."

Although the continuation of the duty of confidentiality after the representation ends is fairly well understood, the possibility that the duty may actually commence even before a representation begins is less understood. RPC 1.18, adopted in Washington in 2006, now makes clear that "[e]ven when no client-lawyer relationship ensues, a lawyer who has had discussions with a prospective client shall not use or reveal information learned in the consultation, except as Rule 1.9 would permit with respect to information of a former client or except as provided in paragraph (e)."³² This rule, although new to the Washington Rules of Professional Conduct in 2006, has long been understood.³³ With minor revisions, it was carried over from the model rules as they were amended in 2002-03. The same duty is spelled out in the Restatement, which was adopted in 1998.³⁴ The Restatement relies on cases dating from the early 1980s for the principle that there is a duty to protect the confidences of a prospective client.³⁵ Finally, it has long been understood that the attorney-client privilege—which is narrower than the ethical duty—may apply to communications with prospective clients.³⁶

The reference in RPC 1.18 to paragraph (e) is to a portion of RPC 1.18 added in Washington:

[a] lawyer may condition conversations with a prospective client on the person's informed consent that no information disclosed during the consultation will prohibit the lawyer from representing a different client in the matter. The prospective client may also expressly consent to the lawyer's subsequent use of information received from the prospective client.³⁷

Other portions of the rule also provide some protection for a lawyer who has acquired confidential information despite reasonable measures to avoid it.³⁸ So it is possible, with care, for a lawyer to avoid becoming bound by a duty of confidentiality to a prospective client or to avoid disqualifying the rest of the lawyer's firm from adverse representation if such confidences have been acquired. The role that RPC 1.18 plays in conflicts of interest is explored in detail in Chapter 7 of this book. But the very presence of the "due care" protections set out in RPC 1.18 underscores the point that, absent such precautions, a duty of confidentiality may well attach before an attorney-client relationship commences and even if such a relationship does not commence.

2. Disclosure Versus Use

Another threshold issue is whether only disclosure or also use of client confidences by the attorney is prohibited. The CPR, under DR 4-101(B), precluded a lawyer from using confidences or secrets not only for the disadvantage of the client but also for the advantage of the lawyer or a third person, absent client consent. In contrast, RPC 1.8(b) precludes the lawyer only from using client information to the disadvantage of a client without client consent, and the same limitation is expressed with regard to former clients in RPC 1.9(c). So may the lawyer use "insider" information for the lawyer's own benefit or the benefit of another when there is no disadvantage possible to the client? In some situations, of course, state or federal law may independently preclude use of insider information, and if that is the case, the lawyer could not use such information for that purpose, quite apart from the lawyers' code of conduct. But what if insider trading rules do not apply? Hazard, Hodes, and Jarvis give the following example:

Lawyer L processes a patent application for a client, a small corporation whose shares are traded on the over-the-counter market. Believing that the new item will be a big success, L buys a large number of the corporation's shares, without telling the client. After the company begins to market the new invention, the price of the shares rises rapidly.³⁹

Hazard, Hodes, and Jarvis conclude that such use is now permitted under the model rules.⁴⁰ If so, it would also be permissible in Washington.

There are several examples in Washington of misuse of confidences by attorneys. In one case, a lawyer named Botimer disclosed client confidences to an adverse party and to the Internal Revenue Service (IRS) and was suspended for six months.⁴¹ In another case, a lawyer named McMurray was suspended for two months because he had used information about a former client's marital difficulties and her relationship with a man not her husband when he defended that man against assault charges by the former client.⁴² The former client had hired the lawyer to represent her on a charge of driving under the influence (DUI), and the court concluded that her attorney was not entitled to turn around and use information he learned during that representation when he defended the man she charged with assault

The respondent's use of information about Ms. Agibinik's marital problems and relationship with Mr. Dunnick was use of a secret. The information was gained in the professional relationship (in discussions in May 1981); it was information which might be embarrassing or detrimental to Ms. Agibinik; and respondent used the information to Ms. Agibinik's detriment in attempting to impeach her testimony.⁴³

In a third case, In re Lynch,⁴⁴ a former deputy prosecutor was suspended for two years, in part for disclosure of the identity of undercover narcotics officers. Evidently the prosecutor had a friend with a drug problem and he wanted to convince the friend that it was difficult to spot an undercover officer. So he photocopied a picture of another prosecutor taken with undercover officers at a party and let it fall into the hands of a drug dealer.

The Restatement takes a more nuanced approach that attempts to incorporate civil rules outside the scope of the ethics code. According to the Restatement, as under RPC 1.8(b) and 1.9(c), a lawyer may not use a client's confidences to the disadvantage of the client (or against client direction). But beyond that, absent client consent, "a lawyer who uses confidential information of a client for the lawyer's pecuniary gain other than in the practice of law must account to the client for any profits made."⁴⁵ The rule is drawn from the Restatement of Agency.⁴⁶ But the phrase "other than in the practice of law" should not be overlooked. It is intended to make allowance for the perfectly normal and appropriate use by a lawyer of client confidences acquired while working for one client to assist a future client, as long as the use does not harm the client from whom the confidences were learned.⁴⁷

Author's Commentary The position of the Restatement of the Law Governing Lawyers seems a sound one as far as it goes, but it does not seem to us to go far enough. Outside the practice of law, a lawyer should not be permitted to "self deal" in client confidences even if the client is not harmed thereby, unless the client consents. The commentary to Section 60 of the Restatement elaborates as follows: [The provision] prohibits a lawyer from using ... confidential client information for the lawyer's personal enrichment, regardless of lack of risk of prejudice to the affected client. ... The sole remedy of the client for breach of the duty is restitutionary relief in the form of disgorgement of profit. ... The strict confidentiality duty of the Subsection is warranted for prophylactic purposes. A lawyer who acquires confidential client information as the result of a representation should not be tempted by expectation of profit to risk a possibly incorrect assessment of future harm to a client. There is no important social interest in permitting lawyers to make unconsented use ... of confidential client information for self-enrichment in personal transactions.⁴⁸ Why the Restatement takes the position that restitution should be the sole remedy is unclear. As with so many of the rules of ethical conduct for attorneys, the provision is drawn from basic principles of fiduciary law. But the fact that a lawyer may be exposed to civil liability for restitution does not mean that the lawyer should not also be subject to discipline for such self-dealing. There may be a variety of cases in which the lawyer will not be able to disgorge the profits made, or in which it may not...