I sued for an insurer to cut off a claimant's workers' comp benefits and confirmed he runs a home business, but that same claimant is now my firm's client for that business. I'll withdraw from both, but must I report the fraud?

Plain-English summary

The inquiring attorney had been retained by an insurance company to initiate suit to suspend workers' compensation benefits to a recipient who was allegedly operating a home business. Through investigation, the attorney confirmed the allegation. Coincidentally, that same recipient had retained the attorney's law firm as the lawyer for the home business. The attorney believed he should withdraw from representing both the insurance company and the benefits recipient, and asked whether he had an obligation to report the findings to the Workers' Compensation Fraud Unit.

As a preliminary matter, the Panel agreed with the decision to withdraw from both cases under Rule 1.17 (declining or terminating representation), which requires a lawyer to withdraw where the representation will violate a rule of professional conduct; the attorney had a conflict of interest under Rule 1.7.

On the reporting question, the Panel applied Rule 1.6 (confidentiality of information), which bars a lawyer from revealing information relating to the representation of a client subject to specified exceptions. Because none of the exceptions applied, the Panel concluded the attorney had no obligation to report the findings to the Workers' Compensation Fraud Unit. It added that the obligation would be different if the attorney were representing the recipient in the workers' compensation proceeding, citing Rule 3.3 (candor toward the tribunal).

Currency note

This opinion was issued in 1994 (Opinion 94-19, issued March 23, 1994), after the Rhode Island Supreme Court adopted the Model Rules of Professional Conduct effective November 15, 1988, and it applies Rules 1.6, 1.7, 1.17, and 3.3 as originally adopted. The Rhode Island Supreme Court later revised the Rules of Professional Conduct in 2007 as part of the nationwide Ethics 2000 process, which amended the confidentiality and conflict rules. 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 Treat this page as historical context, not current guidance.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 mentioned here.

Common questions

Q: Must a lawyer report a client's suspected fraud discovered during the representation?

A: On these facts, no. The Panel concluded that under Rule 1.6, with no exception applicable, the attorney had no obligation to report the findings to the Workers' Compensation Fraud Unit.

Q: Why did the attorney have to withdraw from both matters?

A: The Panel agreed there was a Rule 1.7 conflict in representing both the insurer and the benefits recipient, so Rule 1.17 required withdrawal from both.

Q: When would the reporting answer change?

A: The Panel said the obligation would differ if the attorney were representing the recipient in the workers' compensation proceeding itself, pointing to Rule 3.3 (candor toward the tribunal).

Background and rules framework

The opinion interprets Rhode Island Rules of Professional Conduct 1.7 (conflict of interest: general rule), 1.6 (confidentiality of information), 1.17 (declining or terminating representation; Rhode Island's counterpart to Model Rule 1.16), and references 3.3 (candor toward the tribunal). Rule 1.17 required withdrawal where continued representation would violate a rule; Rule 1.6 barred disclosure absent an applicable exception. The Panel found the exceptions inapplicable, so no reporting duty arose outside a tribunal setting.

Citations and references

Rules of Professional Conduct:

• MR 1.7 / RI RPC 1.7 (conflict of interest: general rule)
• MR 1.6 / RI RPC 1.6 (confidentiality of information; no applicable exception)
• MR 1.16 / RI RPC 1.17 (declining or terminating representation; mandatory withdrawal)
• MR 3.3 / RI RPC 3.3 (candor toward the tribunal; cited for the contrasting situation)

See also

• RI EAP Opinion 93-94: no duty to disclose a client's will fraud under Rule 1.6
• RI EAP Opinion 2024-08: need not disclose a fraudulent document to the court before withdrawing

Source

• Landing page: https://www.courts.ri.gov/attorney-resources/Pages/Ethics-Advisory-Panel-default.aspx
• Original PDF: https://www.courts.ri.gov/Opinions/EAP%2094-19.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain; the linked PDF is authoritative.

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FINAL

ETHICS ADVISORY PANEL
OPINION #94-19 REQUEST #474
Issued March 23, 1994

The inquiring attorney was retained by an insurance company to initiate suit to suspend workers' compensation benefits to a recipient who was allegedly operating a home business. Through investigation, the attorney confirmed the allegation. Coincidentally, this same recipient retained the inquiring attorney's law firm as the lawyer for the home business. The inquiring attorney believes that he/she should withdraw from representing both the insurance company and the benefits recipient but inquires whether he/she has an obligation to report the findings to the Workers' Compensation Fraud Unit.

As a preliminary matter, the Panel agrees with the attorney's decision to withdraw from both cases pursuant to Rule 1.17 entitled "Declining or Terminating Representation." That rule states that a lawyer shall withdraw from the representation of a client if the representation will violate a rule of professional conduct. It appears that the inquiring attorney has a conflict of interest in representing these clients under Rule 1.7 entitled "Conflict of Interest: General Rule."

With regard to whether or not the attorney is under an obligation to report this information, Rule 1.6 entitled "Confidentiality of Information" is applicable. That rule states that a lawyer cannot reveal information relating to the representation of a client subject to certain specified exemptions not here applicable. Since the exceptions are not applicable in this matter the inquiring attorney does not have an obligation to report the findings to the Worker's Compensation Fraud Unit. The attorney's obligation would be different if the attorney were representing the recipient in the Worker's Compensation proceeding. See, Rule 3.3 entitled "Candor Toward The Tribunal."