Rule 1.6 and the noisy withdrawal.

• Author: Pope, Daniel J.
• Position: American Bar Association Model Rules of Professional Conduct

NO OTHER rule of the American Bar Association Model Rules of Professional Conduct has created as much confusion or controversy as Rule 1.6. It requires a lawyer to maintain the confidentiality of information that his client provides to him in his professional capacity. There are two exceptions to this requirement: first, to prevent the client from committing a criminal act that the lawyer believes is likely to result in imminent death or substantial bodily harm; and second, to establish a claim or defense on behalf of the lawyer in a controversy between the lawyer and the client or other similar client-lawyer disputes.

As the comment to the rule points out, almost without exception, clients retain lawyers in order to provide them with advice about what their rights are, how they should conduct their business, or whether a proposed deal is legal and entirely correct. The common law has always recognized that a client's confidential information must be protected from disclosure, because without that assurance, a client will not seek legal advice or provide candid facts on which appropriate legal advice can be based.

Enter: financial fraud

But what are lawyers to do when they know a client is going to engage in financial fraud, or when they learn that a client has used the lawyer's work product in a previous financial fraud?(1) These two problems - the prevention of future financial fraud and the rectification of past financial fraud - are not addressed in the rule itself. They are, however, in the comment, and the comment appears to create a loophole in the rule itself. The comment acknowledges that Rule 1.2(d) prohibits a lawyers from counseling or assisting a client in "conduct that is criminal or fraudulent." And it notes that Rule 1.16(a)(1) requires lawyers to withdraw from representation when necessary to avoid a violation of Rule 1.2(d)-that is, if the "lawyer's services will be used by the client in materially furthering a course of criminal or fraudulent conduct."

But then the comment adds:

After withdrawal the lawyer is required to refrain from making disclosure of the clients' confidences, except as otherwise provided in Rule 1.6. Neither this rule nor Rule 1.8(b) nor Rule 1.16(d) prevents the lawyer from giving notice of the fact of withdrawal, and the lawyer may also withdraw or disaffirm any opinion, document, affirmation, or the like.

This paragraph has become known as the "noisy withdrawal" loophole and was a product of a political compromise within the ABA House of Delegates when the Model Rules were adopted in August of 1983. It resulted from widespread dissatisfaction with the absolute prohibition on whistle-blowing called for by the version of Rule 1.6 approved by the same body just six months earlier.(2)

Since 1983, the overwhelming majority of states that have considered the ABA Model Rules and adopted some version of them have rejected Rule 1.6. Most have either included a prevention provision, a rectification provision, or both.

Closing the hole

In August 1991, the ABA Committee on Ethics and Professional Responsibility proposed an amendment to Rule 1.6 that would have permitted, but not required, lawyers to blow the whistle on clients if their services had been used by a client to commit a crime or fraud. By a wide margin, the ABA House of Delegates rejected the proposal.(3)

Again in 1992, the ABA Ethics and Professional Responsibility Committee attempted to bridge the gap between the black-letter, lipsealing provisions of Rule 1.6 and the problems lawyers face in the real world when they are sued by non-clients who claim their clients perpetuated a fraud on...