Reuters ABA Rejects Change in Fraud Confidentiality Rule By Gail Appleson, Law Correspondent CHICAGO (Reuters) -- The American Bar Association, in the first major
overhaul of its ethics code, on Tuesday rejected a rule allowing
disclosure of clients' secrets to prevent serious financial crimes but
adopted a ban against lawyer-client sex.
The ABA's policy-making House of Delegates voted 255-151 to maintain
the sacred trust between attorneys and clients even when breaking that
confidence would stop a client from committing a crime or fraud that could
cause substantial economic loss.
Opponents of changing the 18-year-old rule said they feared it would
erode the trust between lawyers and clients and leave attorneys vulnerable
to liability suits.
Lawrence Fox, a Philadelphia lawyer and member of the commission that
reviewed the ethics code, told the ABA delegates, ``Confidentiality should
be virtually absolute.''
He said only if clients were assured of secrecy would they feel
comfortable confiding in their lawyers. He also said confidentiality
protected attorneys from liability for failing to disclose what might be a
financial fraud.
``As soon as we lose the shield of confidentiality ... we will be the
ones who get sued,'' Fox said.
ARBITER SAID JURY, COURT
Benjamin Hill, a Tampa attorney, said the proposed change would have
forced attorneys to make judgements better left to juries or courts.
``The arbiter is the jury or the court and that's what it should be,''
Hill argued.
William Paul, an Oklahoma City, Oklahoma, lawyer and former ABA
president, agreed.
``We should not empower ourselves to wear too many hats ... Let's not
seek to be judges of our clients.''
Supporters of the change said the language was so specific it would
only allow disclosure if the client had used the lawyer or the law firm to
help commit the crime.
They argued if a client misuses a law firm, he should forfeit his right
to confidentiality.
``A lawyer should not be required to commit professional and financial
suicide for a client,'' said Seth Rosner, a commission member from New
York.
Nancy Moore, a law professor at Boston University who drafted the
revisions, said most jurisdictions currently allow some type of disclosure
for financial crimes.
She said before the ABA adopted its ethics code in 1983, lawyers had
been permitted to reveal a client's intention to commit a crime.
The ABA voted on Monday to let attorneys break confidentiality only to
stop a client from committing a crime that would likely cause imminent
death or substantial bodily harm.
In other ethics action on Tuesday, the ABA's House passed a
controversial new rule that would prohibit a lawyer from having sex with a
client unless a consensual sexual relationship predated the professional
contact.
Commentary accompanying the proposal cautioned that lawyers should
consider whether even a preexisting sexual relationship would hurt the
lawyer's ability to represent the client.
While the ABA has no power to force individual states to follow its
rules, it serves as a powerful guide for local bar associations. Most
states, the District of Columbia and the Virgin Islands follow versions of
the ABA's ethics code.
Disparities among jurisdictions prompted the ABA to appoint a
commission in 1997 to review the rules and propose revisions that would
lead to uniformity and reflect changes in the profession.
The ABA's decisions this week were part of a broader process in which
the organization is considering a major overhaul of its massive ethics
code.
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August 7, 2001
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