May a Connecticut lawyer allow a title insurer to audit the firm's real-estate IOLTA account, bank statements, and files for transactions insured by that company?
Apply this to your situation
This page answers the general question as of 2011. Ask about yours and see what the current Connecticut Rules of Professional Conduct say for your facts, with citations.
Plain-English summary
A title insurer proposed auditing a firm's real-estate IOLTA account, its bank statements, and six real-estate files for which the insurer had issued policies. The question was whether disclosure during the audit violated Rule 1.6(a).
The Committee concluded that clients in the insured transactions impliedly authorized disclosure to the title insurer as needed to carry out the representation. Providing that information therefore does not violate Rule 1.6.
The account may also contain information about transactions covered by other title insurers. That unrelated information must be redacted before disclosure.
If client identity remains a concern, the lawyer may provide initials or assign a number and disclose only that number. The opinion notes that the insurer permitted redaction and that prior Connecticut guidance recommended a similar method for an Internal Revenue Service audit.
In practice
Under this opinion, implied authorization is limited to information connected with the requesting insurer's transactions. The lawyer must separate or mask unrelated client and transaction information in the shared account records.
Common questions
Q: Does the audit violate Rule 1.6?
A: No, because disclosure concerning the insurer's own transactions is impliedly authorized to carry out the representation.
Q: May the insurer see transactions involving other title companies?
A: No. The opinion says that information should be redacted.
Q: May the lawyer conceal client names?
A: Yes. Initials or assigned numbers may be used when identity remains a concern.
Q: What records did the opinion address?
A: The real-estate IOLTA account, its bank statements, and a subset of files for transactions insured by the auditing company.
Background and rules framework
Rule 1.6(a) permits disclosure of representation information with informed consent or when impliedly authorized to carry out the representation.
Citations and references
Connecticut Rules of Professional Conduct:
- Rule 1.6(a)
Other opinions cited:
- Connecticut Informal Opinion 81-3, masking client identity during an IRS audit
See also
- Florida Ethics Op. 12-4: Title insurer trust-account audits
- CT Informal Op. 14-02: Advance fees and credit cards
- CT Informal Op. 17-02: Third-party claims to client property
Source
- Landing page: Connecticut Bar Association Informal Ethics Opinions
- Original PDF: Informal Opinion 11-07
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