After withdrawing to avoid using a client's falsified medical billings, may a California lawyer disclose the misrepresentation as the reason for withdrawal in a later fee dispute with the former client?
LACBA Ethics Opinion 498: Disclosure of Client Misrepresentation in a Fee Dispute
Short answer: Under Bus. & Prof. Code section 6068(e) and Evidence Code section 958 as analyzed in this opinion, a California lawyer who withdrew to avoid using falsified medical billings may disclose the client's misrepresentation as the reason for the withdrawal in a subsequent fee-dispute proceeding, but only when the misrepresentation is relevant and reasonably necessary because of an issue the client has raised. The committee directs the lawyer to minimize confidentiality intrusion through generalized "for good cause" language in publicly filed papers and more detailed disclosures only in camera or by similar protective methods.
Disclaimer: This is an advisory ethics opinion. Advisory opinions are not binding; they interpret the Los Angeles County Bar Association's view of California's rules of professional conduct and are persuasive authority. This summary is for research purposes only and is not legal advice. Verify current rules before acting on any specific guidance.
About this page: The plain-English summary and Q&A below were written by Ezel based on the official opinion. We do not reproduce the opinion text on this page; follow the linked source for the official text, which controls.
Plain-English summary
The committee considers a contingent-fee personal-injury lawyer who, while reviewing subpoenaed medical records with the client, discovers that the treating physician's billings claim substantially more visits than actually occurred. The client insists on pursuing the claim with the falsified billings. The lawyer withdraws and the client proceeds with another attorney. The question is whether, in a later fee dispute, the lawyer may disclose the client's misrepresentation as the basis for the withdrawal.
The committee anchors the duty of confidentiality in Bus. & Prof. Code section 6068(e), which protects all information the client has requested be held inviolate or the disclosure of which would embarrass or be detrimental to the client (LACBA Opinion 452). The duty extends to former clients (Commercial Standard Title Co. v. Superior Court (1979)) and to instances of civil fraud perpetrated by the client (LACBA Opinions 264, 274, 386).
The committee identifies the narrow exception in Evidence Code section 958: no attorney-client privilege as to a communication relevant to an issue of breach of a duty arising out of the lawyer-client relationship. The committee, following LACBA Opinion 452, applies section 958's logic to section 6068(e)'s broader duty of secrecy, reasoning that allowing testimony on lawyer-client breach issues implies disclosure to the trier of fact and law in the proceeding. The committee also engages Bus. & Prof. Code section 6202's express exception for State Bar fee arbitrations and related proceedings.
The committee rejects allowing the client to use confidential information as a sword and shield: if the client raises an issue that the lawyer can answer only with the confidential information, the lawyer may disclose what is necessary. The committee anchors this in LACBA Opinions 396 and 452 and Brockway v. State Bar (Cal. 1991). The committee discusses Dubrow v. Rindlisbacher (9th Cir. BAP 1998), in which the BAP recognized the attorney's right to defend against breach claims but refused to allow the attorney to use confidential information to bar a bankruptcy discharge that did not call the attorney's conduct or fees into question.
On the manner of disclosure, the committee directs the lawyer to make a generalized disclosure in publicly filed papers (the withdrawal was "for good cause"), comparing California Rules of Court Rule 376(b)'s practice for withdrawal motions, and to disclose more detailed reasons only in an in camera proceeding or by similar protective means.
The committee declines to opine on the lawyer's quantum-meruit claim, treating it as a legal rather than ethical question. The committee notes Caplin & Drysdale, Chartered v. U.S. (1989) as cautioning that attorneys may not seek payment from funds known or with reason to be known to have been obtained through fraud.
In practice
The opinion holds that, under Bus. & Prof. Code sections 6068(e) and 6202 and Evidence Code section 958 as they stood in 1999, the lawyer may disclose the underlying misrepresentation in the fee dispute only to the extent reasonably necessary because of an issue the client raises, and only in a manner that preserves confidentiality outside the proceeding. The committee identifies the disqualifying conduct as broader or unnecessary disclosure, and as disclosure where the client has not put the matter at issue.
California's professional-conduct rules were revised effective November 1, 2018; the duty of confidentiality remains in section 6068(e) and current Rule 1.6. Current Rule 1.6(b)(2) permits disclosure to establish a claim or defense in a controversy with the client, codifying much of the committee's analysis. The committee's analysis predates the 2018 revisions.
Common questions
Q: Can a California lawyer who withdrew because of the client's fraud disclose the fraud in a later fee dispute?
A: Per the opinion, yes, to the extent the disclosure is relevant and reasonably necessary because of an issue the client has raised, but not more.
Q: What if the client has not raised the underlying conduct as a defense?
A: Per the opinion, the lawyer must keep the confidentiality. The exception applies only where the client uses or implicates the confidential information.
Q: How should the lawyer file the withdrawal in the first place?
A: Per the opinion's reference to California Rules of Court Rule 376(b), the lawyer may use a generalized statement like "for good cause" in publicly filed papers, with more detail only in camera or by similar protected means.
Q: Does the duty of confidentiality survive the engagement?
A: Per the opinion, yes. Following Commercial Standard Title Co. v. Superior Court (1979), the duty extends to former clients, including in instances of civil fraud (LACBA Opinions 264, 274, 386).
Q: Can the lawyer still collect a quantum meruit fee?
A: The committee declines to opine on the quantum-meruit question, treating it as a legal issue. The opinion notes Caplin & Drysdale, Chartered v. U.S. (1989) on the proscription against seeking fees from funds known to be obtained through fraud.
Background and rules framework
The opinion interprets Bus. & Prof. Code sections 6068(e) (confidentiality) and 6202 (privilege in fee arbitration), Evidence Code sections 950 et seq. and 958 (lawyer-client dispute exception), and California Rules of Court Rule 376(b) (withdrawal motion declarations). It anchors the duty of secrecy in Commercial Standard Title Co. v. Superior Court (1979) and Brockway v. State Bar (Cal. 1991), and the sword-and-shield analysis in LACBA Opinions 396 and 452.
Citations and references
Statutes:
- Bus. & Prof. Code section 6068(e) (confidentiality)
- Bus. & Prof. Code section 6202 (fee-arbitration privilege exception)
- Evidence Code sections 950 et seq. (attorney-client privilege)
- Evidence Code section 958 (lawyer-client dispute exception)
Court Rules:
- California Rules of Court, Rule 376(b) (withdrawal motion declarations)
Cases:
- Brockway v. State Bar, 53 Cal.3d 51 (Cal. 1991), confidentiality and discipline
- Caplin & Drysdale, Chartered v. U.S., 491 U.S. 617 (1989), fees from fraud-tainted funds
- Commercial Standard Title Co. v. Superior Court, 92 Cal.App.3d 934 (1979), duty extends to former clients
- Dubrow v. Rindlisbacher, 225 B.R. 180 (9th Cir. BAP 1998), no use of confidences to oppose discharge
Other opinions cited:
- Cal. State Bar Formal Opinion 1997-151 (COPRAC): attorney's responsibilities re court-ordered sanctions
- LACBA Formal Opinions 264, 274, 386, 389, 396, 452
See also
- LACBA Opinion 519: Self-Defense Exception in Third-Party Claims
- LACBA Opinion 521: Fee Disputes With Current Clients
- LACBA Opinion 520: Duty When Adverse Party Overpays Settlement
Source
- Landing page: https://lacba.org/?pg=ethics-opinions
- Original PDF: https://lacba.org/docDownload/2010612