Must an appointed criminal defense lawyer tell the court when the client comes into money that may end the client's eligibility for public counsel?

Plain-English summary

The Committee was asked whether appointed defense counsel must reveal client confidences to the court when they bear on the client's eligibility for appointed counsel. In the facts presented, a client who had been found indigent and appointed the Public Defender later told his lawyer he had completed a business venture and wanted to place $200,000 in trust toward potential restitution, an asset that could end his eligibility for publicly funded counsel.

The opinion concluded that Alaska Rule of Professional Conduct 3.3 and Administrative Rule 12(f) each impose an independent obligation on appointed counsel to inform the court of changes in the client's financial status that may affect continued eligibility. Administrative Rule 12(f)(1) expressly requires appointed counsel to advise the court of a change in financial status that would make the person ineligible; the opinion reasoned that because indigency is the court's determination to make, counsel should report the change even if counsel believes it would not change eligibility.

On the duty of candor, the opinion reasoned that Rule 3.3(a)(2) bars knowingly failing to disclose a material fact when necessary to avoid assisting a client's criminal or fraudulent act, and that Rule 3.3(b) extends this duty to the conclusion of the proceeding and supersedes the duty to protect confidences under Rule 1.6. The opinion concluded that failing to report the windfall would defraud the state of resources meant for the truly indigent and make the lawyer an accomplice to the client's fraud. It directed that the proper course is for the lawyer to advise the client of the client's own duty to report, to tell the client the lawyer will report if the client does not, and, if no disclosure occurs within a reasonable time, to make the disclosure.

Currency note

This opinion was issued in 1995, before Alaska's adoption of the 2009 revisions to the Alaska Rules of Professional Conduct. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Did the lawyer's duty of confidentiality protect the client's new assets from disclosure?

A: No. The opinion concluded that under Rule 3.3(b) the duty of candor toward the tribunal superseded the duty to protect confidences under Rule 1.6 where disclosure was necessary to avoid assisting the client's fraud.

Q: What was the lawyer supposed to do first?

A: The opinion directed the lawyer to advise the client of the client's own duty to report the change to the court and to tell the client that the lawyer would report it if the client did not.

Q: What if the lawyer thought the money would not actually affect eligibility?

A: The opinion concluded counsel should still report the change, because whether the client is indigent is the court's determination to make, not counsel's.

Background and rules framework

The opinion interpreted Alaska Rule of Professional Conduct 3.3 (Model Rule 3.3, candor toward the tribunal) and Rule 1.6 (Model Rule 1.6, confidentiality), reading the candor duty as an exception to confidentiality. It applied these against the Alaska Rules of Court governing appointment of counsel at public expense, principally Administrative Rule 12 (including 12(f) on the responsibilities of appointed counsel) and Criminal Rule 39, together with the indigency statutes AS 18.85.120 and AS 18.85.170.

Citations and references

Rules of Professional Conduct:

• Model Rule 3.3 / Alaska RPC 3.3 (candor toward the tribunal)
• Model Rule 1.6 / Alaska RPC 1.6 (confidentiality of information)

Statutes and court rules:

• Alaska Administrative Rule 12 (procedure for appointment of counsel at public expense; 12(f) responsibilities of appointed counsel)
• Alaska Criminal Rule 39 (determination of indigency)
• AS 18.85.120; AS 18.85.170 (indigency determination and definition)

Cases:

• People v. Nilsen, 199 Cal. App. 3d 344 (1988)
• State v. Dale, 439 N.W.2d 112 (S.D. 1989)

See also

• Alaska Ethics Op. 2003-2: Personal Representative Fraud Disclosure
• Alaska Ethics Op. 2022-2: Client False Statements to the Court
• Alaska Ethics Op. 96-3: Disclosure of Client Files Under Subpoena

Source

• Landing page: https://alaskabar.org/ethics-discipline/ethics-opinions/adopted-ethics-opinions-chronological/
• Original PDF: https://alaskabar.org/wp-content/uploads/95-3.pdf

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

Ethics Opinion No. 95-3
Obligation of Appointed Defense Counsel to Reveal Change in Client's
Financial Position Effecting Eligibility.
The Committee has been asked the following question: Does defense
counsel in a criminal proceeding have an obligation to reveal client confidences
to the court if relevant to the client's eligibility for appointed counsel? The
Committee concludes that Alaska Rule of Professional Conduct 3.3 and
Administrative Rule 12(f) each impose an independent obligation on defense
counsel to inform the court of changes in the client's financial status which
may affect the client's continued eligibility to receive legal services at public
expense.
Facts
The facts presented to the Committee are as follows: Client is represented
at trial in a criminal case by private counsel. After conviction, Client appeals
and applies to the court for appointment of the Public Defender Agency. The
court determines that Client is indigent and appoints the Public Defender.
In the course of an interview, Client reveals to his attorney that he has
recently completed a business venture, and wants to place $200,000 in trust to
be applied to his restitution, in the event his conviction is upheld. If this
information is true, Client may no longer be eligible for appointment of counsel
at public expense.
Rules
Administrative Rule 12 and Criminal Rule 39 of the Alaska Rules of Court
govern the procedures for appointment of counsel at public expense.
Administrative Rule 12 provides, in pertinent part:
Rule 12. Procedure for Counsel and Guardian Ad Litem Appointments at Public
Expense
(a) Intent. The court shall appoint counsel or a guardian ad litem only when the court
specifically determines that the appointment is clearly authorized by law or rule, and that
the person for whom the appointment is made is financially eligible for an appointment at
public expense.
(b) Appointments under AS 18.85.100(a) (Public Defender Agency)

(2) Determination of Indigency. Determination of indigency or financial inability for
appointments under paragraph (b) of this rule must be made in accordance with the
provisions of Criminal Rule 39.
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(f) Responsibilities of Appointed Counsel.
(1) An attorney appointed to represent an indigent person must advise the court if the
attorney learns of a change in the person's financial status that would make the person
financially ineligible for appointed counsel.
(2) An attorney appointed to represent an indigent person must move to withdraw if the
attorney reasonably believes that the person has made a material misrepresentation of the
person's financial status to the court. A material misrepresentation is a misrepresentation
of facts that would make the person financially ineligible for appointed counsel. The
attorney is not required to disclose to the court the existence or nature of the
misrepresentation unless disclosure is necessary to prevent the person from fraudulently
securing the services of appointed counsel.
Alaska R. Crim. P. 39(b)(1) provides:
If defendant desires the aid of counsel but claims a financial inability to employ counsel,
the court or its designee shall determine whether defendant is an "indigent person," as
defined by statute (endnote 1) by placing defendant under oath and asking about
defendant's financial status, or by requiring defendant to complete a signed sworn
financial statement. The court shall order defendant to execute a general waiver (endnote
2) authorizing release of income information to the court.
Alaska Rule of Professional Conduct 3.3 provides, in pertinent part:
Rule 3.3. Candor Toward the Tribunal.
(a) A lawyer shall not knowingly:

(2) fail to disclose a material fact to the tribunal when disclosure is necessary to avoid
assisting a criminal or fraudulent act by the client;

(b) The duties stated in paragraph (a) continue to the conclusion of the proceeding, and
apply even if compliance requires disclosure of information otherwise protected by Rule
1.6.
Analysis - Duty to Disclose Under Administrative Rule 12
Although Administrative Rule 12 does not expressly require a criminal
defendant to report changes in financial status,(endnote 3) it clearly requires
appointed counsel to do so. The Rule requires appointed counsel to advise the
court upon learning of a "change in the person's financial status that would
make the person financially ineligible" for appointed counsel. Here, Client has
received at least $200,000 since the court made its eligibility determination.
While the size of this asset is not dispositive of the issue of indigency,(endnote
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4) there is no doubt that in the vast majority of cases, a windfall in this amount
would render the client ineligible for appointed counsel. The attorney would
then be obligated to report this information under Admin. R. 12(f). (endnote 5)
In the unlikely event that appointed counsel believes the $200,000
payment would not affect his client's eligibility, the Committee believes a proper
reading of the Rule requires counsel to report the financial change to the court,
as whether or not the client is indigent is the court's determination to make. AS
18.85.120.
Duty to Disclose Under Alaska Rule of Professional Conduct 3.3
Alaska Rule of Professional Conduct 3.3 (a)(2) prohibits a lawyer from
knowingly failing to disclose a material fact to a tribunal when disclosure is
necessary to avoid assisting a criminal or fraudulent act by the client. ARPC
3.3(b) extends the prohibition to the conclusion of the proceeding, and makes it
clear that the lawyer's duty of candor toward the tribunal supersedes the duty
to protect client confidences. The Comment to Model Rule 1.6 specifically cites
RPC 3.3 (a)(2) as an exception to a lawyer's duty to maintain client confidences.
Here, knowledge of the $200,000 in Client's possession is material
(endnote 6) to his or her continued eligibility for legal services. Both Client and
defense counsel have a continuing duty to report changes in financial
circumstances which may affect the client's eligibility for continued services.
The Comment to Model Rule of Professional Conduct 3.3 states, "[under some
circumstances, a failure to disclose is tantamount to affirmative
misrepresentation."
Failure to report the change defrauds (endnote 7) the state by forcing it
to expend limited resources, intended to benefit the truly indigent, on
defendants who can bear the cost of their own defense. The lawyer's knowledge
of the payment and failure to report it to the court makes the lawyer an
accomplice to the client's fraudulent act.(endnote 8) People v. Nilsen, 199
Cal.App.3d 344, 351-52, 244 Cal.Rptr. 814, 819 (Dist. Ct. App. 1988); State of
South Dakota v. Dale, 439 N.W.2d 112, 113 (S.D, 1989).
In reaching its conclusion, the Committee has carefully balanced the
lawyer's duty of loyalty to the client and preservation of client confidences, on
the one hand, against the conflicting duty of candor toward the tribunal as an
officer of the court. As the Comment to ARPC 1.6 points out, the lawyer's duty
to maintain confidentiality of information relating to the representation
encourages the client to communicate fully and frankly; this in turn facilitates
full development of the facts necessary to properly represent the client and
avoidance of any violation of the law in the proper exercise of the client's rights.
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Notwithstanding the importance of these goals, however, a lawyer's
primary duty must be to the law, and the Committee agrees with the
authorities cited for that proposition in the Comment to Model Rule 3.3. See,
e.g., State v. Krutchen, 101 Ariz. 186, 191, 417 P.2d 510, 515 (1966) ("The duty
of an attorney to a client . . . is subordinate to his responsibility for the due
and proper administration of justice."), cert. denied, 385 U.S. 1043 (1967); Fite
v. Lee, 11 Wash. App. 21, 28, 521 P.2d 964, 968 (1974) ("Where the duties to
his client to afford zealous representation conflict with his duties as an officer
of the court to further the administration of justice, the private duty must yield
to the public duty."); and Dodd v. Florida Bar, 118 So.2d 17, 19 (Fla. 1960) ("In
our system the courts are almost wholly dependent on members of the bar to
marshal and present the true facts . . . When an attorney adds or allows false
testimony . . . it (is) impossible for the scales to balance. No breach of
professional ethics, or of the law, is more harmful to the administration of
justice.").
Conclusion
The Committee believes the proper course of action for the lawyer would
be to advise the client of the client's duty to report the financial change to the
court. The lawyer should further advise the client that if the client fails or
refuses to advise the court, the lawyer will do so. The lawyer has the further
obligation to determine whether disclosure to the court has occurred, and if
none has been made within a reasonable time, the lawyer has an affirmative
duty to make the disclosure.
Approved by the Alaska Bar Association Ethics Committee on January 5, 1995.
Adopted by the Board of Governors on March 17, 1995.
Endnotes:
1. AS 18.85.170 defines an "indigent person" as one who, "at the time need
is determined, does not have sufficient assets, credit, or other means to
provide for payment of an attorney and all other necessary expenses of
representation without depriving the party or the party's dependents of
food, clothing, or shelter and who has not disposed of any assets since
the commission of the offense with the intent or for the purpose of
establishing eligibility for assistance. . ." AS 18.85.120 provides that
"determination of a person's indigency shall be made by the court in
which an action against the person is pending." In making its
determination, the court is obliged to consider such factors as "income,
property owned, outstanding obligations, and the number and ages of
dependents."
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2. The General Waiver form utilized by the Alaska Court System appears on
   CR-205, the Request For Appointed Counsel Form. The form states that
   the defendant understands that (1) defendant must provide all financial
   information requested by the court; (2) the information provided may be
   made available to the Attorney General at the conclusion of the case, and
   that defendant may be prosecuted for perjury if false information has
   been provided; (3) in the event that defendant's financial status changes
   and defendant does not report that fact to the court, that appointed
   counsel is required by law to do so.
3. Such a requirement can be inferred from the Rule, however, Admin. R.
   12(a) provides that only those who are financially eligible should receive
   appointed counsel. The Rule also requires public counsel to withdraw
   where "the basis for appointment is not clearly authorized." Admin. R.
   12(d). Moreover, Alaska R. Crim. P. 39, which governs determinations of
   indigency made pursuant to the Administrative Rule, provides for a
   review of defendant's financial condition "at any time" to determine
   whether the defendant continues to be indigent. Alaska R. Crim. P. 39(e).
   Finally, the Request For Appointed Counsel form (CR-205), which
   defendants are required to execute as a condition of receiving appointed
   counsel, requires either the defendant or appointed counsel to inform the
   court of changes in the defendant's financial situation.
4. Since income is only one of the factors to be considered under AS
   18.85.120, it is conceivable that a person with $200,000 might be found
   indigent, e.g., where he or she had no other income or property,
   combined with an outstanding child support or IRS obligation
   substantially in excess of that amount.
5. Upon being informed that there has been a change in the client's
   financial circumstances, the court would most likely require the client to
   execute an updated financial affidavit; therefore, the most efficient way to
   report such a change would be for the client to execute and submit an
   updated or amended financial affidavit.
6. Facts are "material" if they could affect the outcome of the case, or are
   necessary in determining an issue in dispute.
7. The Comment to Model Rule 3.3 defines "fraud" as having three
   components: (1) the client's representations or conduct create a false
   impression; (2) that impression is material; and (3) the client intends to
   create a material misconception.
8. Client may also be subject to prosecution for contempt or perjury, in
   which case defense counsel may be assisting a criminal act, in further
   violation of Rule 3.3(a)(2). Whether defense counsel could be compelled to
   testify against the client in a criminal proceeding is an evidentiary issue
   for the trial court, and the Committee declines to address it here.

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