In another post, I discuss Louis C.K.’s apology for his repeated sexual misconduct. Although he apparently didn’t settle claims for this conduct (that I have read about, anyway), other wrongdoers certainly have done so. In those cases, lawyers have negotiated the settlements, which typically include strict provisions requiring confidentiality, often with harsh liquidated damage provisions for violation of the agreement.
This post considers lawyers’ ethical duties in negotiating such agreements.
Under the Rule 1.2(d) of the Model Rules of Professional Conduct, lawyers may not “counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent.” Comment 10 states, “When the client’s course of action has already begun and is continuing, the lawyer’s responsibility is especially delicate. The lawyer is required to avoid assisting the client, for example, by drafting or delivering documents that the lawyer knows are fraudulent or by suggesting how the wrongdoing might be concealed. A lawyer may not continue assisting a client in conduct that the lawyer originally supposed was legally proper but then discovers is criminal or fraudulent.” (Emphasis added)
That sounds good, though lawyers regularly assist clients in ways that seem to violate this rule. Sometimes this assistance is considered quite legitimate.
Confidential settlements have stirred controversy when they have been used to hide serious public health and safety violations, though people generally think that confidential settlements are appropriate. Indeed, people often tout confidentiality as one of the benefits of ADR.
Defense lawyers inevitably represent some wrongdoers and generally it isn’t considered ethically problematic for the lawyers to negotiate confidential settlements on their behalf. Again, this usually is seen as beneficial.
When lawyers repeatedly settle with victims of sexual misconduct to avoid publicity for the abusers and enable them to continue their pattern of abuse, however, the lawyers act immorally in my view.
While serial sexual predation is relatively easy to understand and condemn, there are much more opaque situations where lawyers use confidential settlements to help individuals and entities repeatedly violate other laws such as those protecting against financial fraud and health and safety violations, among others.
This is a tricky problem because lawyers can (sometimes accurately) argue that, when they settle one case, they don’t know that their clients will repeat the wrongful conduct in future cases. But some lawyers clearly can reasonably foresee that their clients are likely to do so and that the lawyers’ work will enable future wrongful conduct. Rule 1.2 doesn’t seem to address enabling clients’ criminal or fraudulent actions in (seemingly) unrelated future situations.
I am not an expert in legal ethics and I don’t know of any rule that prohibits legal enabling of serial law-breaking. Do you?
While I don’t know of any legal standard or law pertaining directly to the legal enabling of serial law-breaking, it would likely be in conflict with the premise that one generally cannot be held accountable for something they have not yet done or an action they took that only may result in enabling another to possibly break the law. Rules of confidentiality (specifically 1.6) authorize an attorney to reveal otherwise confidential information if it will prevent the commission of a crime or fraud that would cause substantial injury in furtherance of which the client has used the attorney’s services. This would apply in your fact scenario as a disclosure that could result in the countermand of confidentiality in a settlement as well as allow the privileged information to be evaluated.
This article identifies an interesting conflict between the lawyer’s ethical duties and a defendant’s right to counsel, regardless of whether the defendant is likely to commit further crimes. If Rule 1.2(d) of the Model Rules of Professional Conduct was more strictly enforced, criminal defendants might face a greater burden in securing counsel if his/her lawyer is required to recuse themselves whenever they know of criminal or fraudulent conduct or can reasonably foresee that their client with commit further crime or fraud. Additionally, such strict enforcement might encourage lawyers, particularly criminal defendants or those likely to represent those engaged in crime or fraud, to intentionally keep himself/herself unaware of facts that would confirm their client’s criminal activity to maintain that client (and continue to receive lawyer’s fees).
As far as the issue raised with confidential settlements, I would agree that such confidential settlements violate Rule 1.2(d) of the Model Rules of Professional Conduct on its face because the lawyer is “suggesting how the wrongdoing might be concealed” by encouraging confidential settlement. Moreover, to encourage such confidential settlement, the lawyer is impliedly acknowledging that they have knowledge of criminal or fraudulent conduct, in which case, under Rule 1.2(d), the lawyer must cease assisting the client. However, confidential settlements, as acknowledge above, are beneficial. Minimally, settlements preserve judicial economy and prevent the public from learning of the dispute – which may be desired by not only the client, but the victim in a sexual harassment case who would otherwise not come forward if confidential settlement was not possible.
To resolve these conflicts, I think it appropriate for Rule 1.2(d) to be modified or for additional comments to be added to the rule to provide further guidance to lawyers.