If a client secretly makes a side deal that renders a signed court stipulation false, must the lawyer tell the court, and can the lawyer reveal it?
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This page answers the general question as of 2005. Ezel answers yours: whether it's allowed on your facts, under the current rules of professional conduct in your state, with citations.
Plain-English summary
A lawyer (RA) negotiated a settlement that became a signed court stipulation. As the client was about to sign, the lawyer learned the client had a secret "side agreement" with the other party that redistributed the funds, making the stipulation materially false. The lawyer urged the client to correct the stipulation or let the lawyer disclose the side deal; the client refused and asserted attorney-client privilege. The client signed the stipulation, and the lawyer moved to withdraw before judgment was entered. The committee analyzed Rules 1.2, 1.6, and 3.3 as they stood in 2005.
On whether the lawyer had to tell the court, the committee treated the stipulation as the equivalent of the client's sworn offer of false evidence. It concluded that Rule 3.3(d) governed: where the false evidence is the client's own testimony and the client will not consent to disclosure after reasonable efforts, the lawyer's obligation is to seek to withdraw "without disclosure." So the lawyer had no duty to disclose the side agreement; withdrawal was mandatory, but disclosure was not.
On whether the communication was absolutely privileged, the committee said it could be revealed only under a Rule 1.6 exception. The mandatory-disclosure provision (preventing imminent death or substantial bodily harm) did not apply. Rule 1.6(d) permitted, but did not require, disclosure if the lawyer reasonably believed nondisclosure was likely to cause substantial financial harm to another, which the committee said was a fact question it could not decide. Rule 1.6(f) did not apply, because the stipulation was filed with the lawyer's knowledge and because Rule 3.3(c) and (d) limited that exception. The committee concluded the lawyer may not disclose the falsity unless he believes nondisclosure will cause another substantial financial injury.
In practice
This opinion applies the version of North Dakota's Rules of Professional Conduct in force in 2005, which North Dakota materially revised effective August 1, 2006; the analysis below reflects the earlier rule. Under that rule, the committee held that a lawyer who learns the client has rendered a court stipulation false, where the falsity is the client's own offer of false evidence, must seek to withdraw without disclosing to the court if the client refuses to consent. The committee treated disclosure of the underlying communication as permissive only, and only on the narrow Rule 1.6(d) basis that the lawyer reasonably believes nondisclosure is likely to cause substantial financial harm to another.
Common questions
Q: Does the lawyer have to tell the court that the stipulation is false?
A: No, under the rule the committee applied. Because the stipulation was the client's own offer of false evidence, Rule 3.3(d) required the lawyer to make reasonable efforts to get the client's consent and, failing that, to seek to withdraw without disclosure.
Q: Is the client's communication about the side agreement absolutely privileged?
A: No. The committee said it could be revealed only if a Rule 1.6 exception applied. The only one potentially available was Rule 1.6(d), which permits (but does not require) disclosure if the lawyer reasonably believes nondisclosure is likely to cause substantial financial harm to another.
Q: Could the lawyer rely on the exception for rectifying a client's fraud?
A: No. The committee found Rule 1.6(f) inapplicable, both because the stipulation was filed with the lawyer's knowledge and because Rule 3.3(c) and (d) limited that exception where the falsity was in the client's evidence.
Background and rules framework
The opinion interprets North Dakota Rules of Professional Conduct 3.3 (Model Rule 3.3, candor toward the tribunal), 1.6 (Model Rule 1.6, confidentiality), and 1.2 (Model Rule 1.2, scope of representation) as they stood in 2005. The version of Rule 3.3 applied here directed a lawyer to seek to withdraw "without disclosure" when the false evidence was the client's own; North Dakota revised its Rules of Professional Conduct effective August 1, 2006, so the rule text quoted in the opinion reflects the earlier version.
The opinion is issued under North Dakota Rule for Lawyer Discipline 1.2(B), the safe-harbor provision protecting good-faith reliance on a written ethics-committee opinion.
Citations and references
Rules of Professional Conduct:
- Model Rule 3.3 / N.D.R. Prof. Conduct 3.3 (candor toward the tribunal)
- Model Rule 1.6 / N.D.R. Prof. Conduct 1.6 (confidentiality of information)
- Model Rule 1.2 / N.D.R. Prof. Conduct 1.2 (scope of representation; no assisting fraud)
- N.D.R. Lawyer Discipline 1.2(B) (safe harbor for reliance on a committee opinion)
See also
Source
- Landing page: https://www.sband.org/page/ethics_opinions
- Original PDF: https://cdn.ymaws.com/www.sband.org/resource/resmgr/docs/for_lawyers/opinion_05-03.pdf
Original opinion text
Best-effort transcription from a scanned PDF. Minor errors may remain; the linked PDF is authoritative.
STATE BAR ASSOCIATION OF NORTH DAKOTA
ETHICS COMMITTEE
Opinion No. 05-03
March 24, 2005
The Ethics Committee has been asked to issue an opinion on whether the
Requesting Attorney has any further obligations to the court or the client after
withdrawing from representation under N.D.R.Prof. Conduct 3.3(d).
I. Applicable North Dakota Rules of Professiona} Conduct
Rule 1.2 Scope of Representation
Rule 1.6 Confidentiality of Information
Rule 3.3 Candor Toward the Tribunal
i. Background Provided by Requestor
Requesting Attorney (“RA”) represented Client in an adjudicatory proceeding.
RA and Opposing Counsel (“OC”) reduced to writing a negotiated settlement agreement
that was finalized in the form of a Court Stipulation (“Court Stipulation”). Client visited
RA’s office to sign the finalized agreement. When Client insisted on hand delivering the
agreement to the other party, RA became suspicious and asked Client if he had something
he was not telling him. Client admitted to having a separate agreement with the other
party. The separate “side agreement” had a different distribution of funds, resulting in a
' fundamentally different agreement.
The “side agreement” diverted money to the Client. Client was advised by RA to
correct the Court Stipulation and to include the side agreement. Client was also asked to
permit RA to disclose the side agreement to the Court and OC.
Client refused to alter the Court Stipulation or to permit RA to disclose the
information. Client specifically indicated to RA that the information disclosed about the
side agreement was protected by the attorney-client privilege.
RA informed Client of the potential tax and legal implications of the side
agreement, which included the potential for fraud and well as other legal issues. RA
tried without success to dissuade Client from executing the Court Stipulation.
In light of Client’s refusal to correct the Court Stipulation or to disclose the side
agreement, RA informed Client that he had no option but to withdraw immediately from
representing him.
Client then signed the Court Stipulation and the signature page was sent to OC.
Subsequently that day, RA wrote OC informing him that he would be withdrawing as the
attorney of record. The same day RA filed a Motion to Withdraw, advising the Court
—
that an agreement had been reached, the Court Stipulation was signed by his client, and
that no client harm was anticipated as a result of his withdrawal.
At the time of the Motion, Judgment had not yet been entered by the Court.
The Court granted RA’s Motion to Withdraw and the case is now finalized.
DI. Questions Presented
-
Is there an obligation to disclose the side agreement to the Court?
-
Is the communication regarding the “side agreement” absolutely
protected by the attommey-client privilege?
IV. Discussion
The following relevant sections of the North Dakota Rules of Professional: .-
Conduct apply. - wg
Rule 1.2 Scope of Representation.
(d) A lawyer shall not counsel a client to engage, or assist a client,
in conduct that the lawyer knows is criminal or fraudulent, but a
lawyer may discuss the legal consequences of any proposed course
of conduct with a client and may counsel or assist a client to make
a good faith effort to determine the validity, scope, meaning or
application of the law.
(e) When a lawyer knows that a client expects assistance not
permitted by these rules or other law, the lawyer shall consult with
the client regarding the relevant limitations on the lawyer’s
conduct.
Comment to Rule 1.2 states in relevant part:
Paragraph (d) applies whether or not the defrauded
party is a party to the transaction. Hence, a lawyer
should not participate in a sham transaction; for
example, a transaction to effectuate criminal or
fraudulent escape of tax liability.
Rule 1.6 Confidentiality of Information.
A lawyer shall not reveal, or use to the disadvantage of a client, information
relating to the representation of the client unless required or permitted to do so by this
rule. When such information is authorized by this rule to be revealed or used, the
revelation or use shall be no greater than the lawyer reasonably believes necessary to the
purpose. Such revelation or use is:
(a) required to the extent the layer believes necessary to prevent
the client from committing an act that the lawyer believes is likely
to result in imminent death or imminent substantial bodily harm;
(d) permitted to the extent the lawyer reasonably believes necessary to
prevent the client from committing.a crimainal.or fraudulent act that the
lawyer reasonably believes is likely to result nthonsimminent death, non-
imminent substantial bodily harm, or substantial injury or harm to the ~
financial interests or property of another;
(f) permitted, except as limited by Rule 3.3(c), to prevent or to rectify the
consequences of a client’s criminal or fraudulent act in the furtherance of
which the lawyer’s services had been used without the lawyer’s
knowledge;
Rule 3.3 Candor Toward the Tribunal.
(a) A lawyer shall not:
(2) Offer evidence that the lawyer knows to be false.
(c) Ifa lawyer has offered material evidence and comes to know of its
falsity, the lawyer shall disclose this fact to the tribunal unless the
evidence was contained in the testimony of the lawyer’s client. ...
(d) If a lawyer has offered material evidence and comes to know of its
falsity and the evidence was contained in the testimony of the lawyer’s
client, the lawyer shall make reasonable efforts to convince the client
to consent to disclosure. If the client refuses to consent to disclosure,
the lawyer shall seek to withdraw from the representation without
disclosure. If withdrawal is not permitted, the lawyer may continue
the representation and such continuation alone is not a violation of
these rules.
- Is there an obligation to disclose the side agreement to the Court?
Because the side agreement alters the facts agreed to in the Court Stipulation, the
submitted Court Stipulation is false. If the Court Stipulation is “evidence,” Rule 3.3
applies.
Black’s Law Dictionary defines evidence as “{a]ll the means by which any
alleged matter of fact, the truth of which is submitted to investigation, is established or
disproved... The.term “Stipulation” is defined in Black’s Law Dictionary as a “voluntary
agreement .. . concetiling-isposition of some relevant point so as to obviate the need for
proof.” In other words, the Stipulation was a sworn agreement to avoid the necessity of
presenting evidence to the Court. As such, it is the equivalent of a sworn statement
attesting to a fact.
Accordingly, because the Court Stipulation involved the Chent’s offer of false
evidence, Rule 3.3(d) governs this question. A lawyer’s ethical obligation under Rule
3,3(d), if the client does not consent to disclosure after reasonable efforts to convince the
client to do so, is to withdraw from representation “without disclosure.” Thus, under the
plain requirement so Rule 3.3(d), the RA does not have an obligation to disclose the side
agreement to the Court. To the contrary, Rule 3.3(d) mandates that the RA seek to
withdraw ‘‘without disclosure.”
- Is the communication regarding the “side agreement” absolutely
protected by the attorney-client privilege?
The communication regarding the side agreement can be revealed only if it meets
one of the exceptions in Rule 1.6.
Rule 1.6(a) describes when disclosure is mandatory; none of the situations in Rule
1.6(a) apply to the facts described by RA.
Rule 1.6(d) permits disclosure if the lawyer reasonably believes that a criminal or
fraudulent act is likely to result in “substantial injury or harm to the financial interests or
property of another.” This is a factual determination the Committee cannot appropriately
make. However, if RA reasonably believes that the failure to disclose the side agreement
is likely to result in substantial harm to the financial interests of another, RA may, but is
not obligated to, reveal the communication.
Te eter
Rule 1.6(f) also permits disclosure of confidential communications “to prevent or
to rectify the consequences of a client’s criminal or fraudulent act in the furtherance of
which the lawyer’s services had been used without the lawyer’s knowledge.” This
subsection does not apply for two reasons: first, the Court Stipulation was sent to OC
and sent to the Court with RA’s knowledge not without it; and, second, Rule 1.6(f)
prohibits disclosure of confidences if the limitations of Rule 3.3(c) apply. Rule 3.3(c)
and (d) prohibit the disclosure because the Court Stipulation is equivalent to the Client’s
testimonial offer of false evidence.
Accordingly, disclosure is permitted only if the RA believes that there may be
substantial harm to the financial interests of another.
V. Conclusion
There is no obligation to disclose the side agreement to the Court; however,
seeking to withdraw is mandatory. RA may not disclose the falsity of the Court
Stipulation unless he believes it will cause another substantial financial injury.
This-opinion is provided pursuant to Rule ].2(B) North Dakota Rules for Lawyers
Discipline, which states:
A lawyer acts with good faith and reasonable reliance on a
written opinion or advisory letter of the ethics committee of
the association is not subject to sanction for violation of the
North Dakota Rules of Professional Conduct as to the
conduct that is the subject of the opinion or advisory letter.
This opinion was drafted by Adele Page and was unanimously approved by the
Ethics Committee on April , 2005.
aa ——an
/Matk Hanson, Chair
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