Must a Vermont lawyer tell an insurer about later client information that could have reduced an already agreed injury settlement?

Plain-English summary

An injury lawyer negotiated an insurance settlement using client information supported by medical records. After receiving the check but before cashing it, the lawyer learned additional facts from the client that might have reduced the settlement. The lawyer did not characterize the client's conduct as fraud.

The committee said former DR 7-102(B)(1)'s correction duty required information clearly establishing fraud. It accepted the lawyer's inability to find fraud on the limited facts and followed ABA Formal Opinion 341's interpretation that client-supplied information was protected. In the absence of a disclosure duty, former DR 4-101(B) barred revealing the confidence or secret to the opposing party. The opinion said the lawyer might encourage the client to reopen the settlement, but the Code imposed no such duty.

Currency note

This opinion was issued in 1982 under Vermont's former Code of Professional Responsibility. The Vermont Supreme Court's rules history states that the Rules of Professional Conduct applied to lawyer conduct after September 1, 1999. Later amendments or opinions may have changed the analysis. Treat this opinion as historical context and verify current rules before relying on it.

Common questions

Q: Did the later information have to be disclosed to the insurer?

A: The committee said no on these facts, because the lawyer could not establish fraud and the new information was a client confidence or secret.

Q: Did the committee say the lawyer had to ask the client to reopen settlement?

A: No. It raised that as something the lawyer might want to encourage, while saying the former Code imposed no such obligation.

Background and rules framework

The opinion considered former DR 7-102(A) and (B)(1) on false evidence and client fraud, DR 4-101(B) on confidentiality, and ABA Formal Opinion 341's interpretation of protected client communications.

Citations and references

Rules of Professional Conduct:

• Vermont Code of Professional Responsibility DR 7-102(A), DR 7-102(B)(1), and DR 4-101(B)

Other opinions cited:

• ABA Formal Opinion 341 (1975)

See also

• Vermont Ethics Op. 81-01: Client fraud information
• Vermont Ethics Op. 89-02: Client death during settlement

Source

• Landing page: Vermont Bar Association deceit and fraud opinions
• Original PDF: Opinion 82-07
• Vermont Supreme Court rules history, “These rules apply to lawyer conduct after September 1, 1999.”