Opinion #100. Threatening Grievance Action to Influence Malpractice Settlement Negotiations

Issued by the Professional Ethics Commission

Date Issued: October 4, 1989

Question

Bar Counsel has requested an opinion from the Commission regarding an attorney’s duty to keep separate the filing of a grievance and a claim of malpractice arising out of the same facts. Attorney A has acquired written documents prepared by Z, his client’s former attorney, which indicate that many of his client’s legal problems were caused by Z’s negligent conduct. As a result, Attorney A believes that his client has a meritorious legal malpractice case against Z and that Rule 3.6(a) may have been violated by Z’s conduct.

In addition to Z’s allegedly negligent conduct, A’s client strongly contends that at least one of the documents executed by Z was fraudulently prepared. The client has indicated that he has no real interest in initiating disciplinary proceedings against Z under the Bar Rules. However, the client has requested Attorney A to negotiate “in any way possible” with Z to maximize his recovery with respect to his malpractice claim. The client has even implied that A should threaten to file a grievance against Z in the course of negotiating with him.

On the basis of the foregoing facts, Bar Counsel has asked the following questions:

  1. To what extent may an attorney make any reference to the possible, intended or actual filing of a grievance complaint against another attorney in the course of his discussions or negotiations with that attorney (or his counsel) regarding the settlement of a related legal malpractice action against that same attorney?

  2. Does Rule 3.2(e)(1) mandate reporting that attorney’s conduct to the Board, where although the “reporting attorney” has some doubts in his mind as to the facts supporting the mandatory reporting provisions, his affected client is adamant that those facts do demonstrate potential fraudulent conduct on the part of the attorney? For purposes of this question, the client’s present attorney agrees that if his client’s interpretation of the facts is true, then fraud was committed by the former attorney.

  3. If the answer to question 1 is such that any mention by the present attorney of the potential grievance action in relation to the settlement of the malpractice action is seen as a violation of Rule 3.6(d), then is the present attorney required to withdraw from representation of his client pursuant to Rule 3.5(c)(3)?

Opinion

It is clear that it would be unethical for Attorney A to threaten to present a grievance in order to enhance the chances of a favorable settlement of the malpractice claim against Attorney Z. Bar Rule 3.6(d) provides that:

A lawyer shall not present, or threaten to present, criminal, administrative, or disciplinary charges solely to obtain an advantage in a civil matter.

Indeed, any mention of the possibility of filing a grievance made in the course of the negotiations concerning the malpractice claim would be suspect if it conveyed a subtle inference that a trade‑off might be possible.

In connection with Attorney A’s duty to report Z’s possible misconduct to the Grievance Commission, Rule 3.2(e)(1) states that:

(1) A lawyer possessing unprivileged knowledge of a violation of the Maine Bar Rules that raises a substantial question as to another lawyer’s honesty, trustworthiness, or fitness as a lawyer in other respects shall report such knowledge to a tribunal or other authority empowered to investigate or act upon such violation.

The words “that raises a substantial question as to another lawyer’s honesty, trustworthiness, or fitness as a lawyer in other respects” were added by amendment to the rules adopted on February 1, 1984. The Advisory Committee Note advises that the purpose of the amendment was to make clear that “only violations raising a substantial question of professional fitness need to be reported.”[1] The word “substantial” is said to relate to the seriousness of the possible offense and not to the quantum of evidence of which the lawyer is aware. Ibid. The amendment is nevertheless intended to incorporate the statement contained in ethical consideration E.C. 1‑4 of the A.B.A. Code of Professional Responsibility that a lawyer is obligated to report only that “which he believes clearly to be in violation of the Disciplinary Rules.” Thus the lawyer’s “knowledge” of the offense for purposes of Rule 3.2(e)(1) should be based on a substantial degree of certainty and not on rumor or suspicion.

In the present case, Attorney A apparently does not share his client’s conviction that Attorney Z was guilty of fraud. Lacking the requisite “knowledge” of the violation of the Bar Rules, Attorney A has no obligation to report it. If his client remains adamant, A can instruct him how to file his own grievance with Bar Counsel concerning the alleged fraud.

Finally, the Commission is asked whether the ethical restriction upon mentioning the possibility of filing a grievance in the context of negotiating a settlement of the malpractice claim requires him to withdraw from the case. The answer is simply that A must advise his client that the Bar Rule forbids him to use the threat of filing a grievance as a negotiating tool. If the client nevertheless insists upon using the grievance as a lever, A should advise him that he will not be able to represent him further.


Footnote

[1] The consequences of a failure to report lawyer misconduct can be severe. See, e.g., In re Himmel, 125 Ill.2d 531, N.E.2d 790 (1988) in which an attorney was suspended from practice for one year for failure to report a conversion of client funds by another lawyer.


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