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Disclosure of Settlement Terms to Former Lawyer Asserting a Claim for Fee Division [Proposed 2013 Formal Ethics Opinion 12]

Absent client consent or applicability of one of the Rule 1.6(b) exceptions, a client's lawyer is not permitted to disclose settlement information to the client's previous attorney.

North Carolina State Bar Building Photo Courtesy of the North Carolina State Bar

View proposed ethics opinion in full here.

This proposed opinion involves a situation where a client retained Lawyer A but later dismissed Lawyer A and retained Lawyer B to handle the matter.  Subsequently, Lawyer B settled the matter.  Lawyer A was never compensated and now seeks disclosure of the settlement terms in order to calculate the amount of shared fee due to Lawyer A.  The client requested that Lawyer B keep this information confidential, and Lawyer B has obliged that request.

The proposed opinion rules that Lawyer B may not disclose the details of the settlement agreement.  In arriving at this conclusion, the opinion distinguishes 2003 Formal Ethics Opinion 11 from the facts of the current situation.  In 2003 FEO 11, the underlying issue was the duty of lawyers who have practiced together to deal honestly with each other regarding interrelated claims.  By contrast, the lawyers in the current factual situation never practiced together; Lawyer A’s claim arises from Lawyer A’s separate representation of the client.

Client confidentiality is “paramount among the duties a lawyer owes to the client.”  Absent client consent or applicability of one of the Rule 1.6(b) exceptions, Lawyer B is not permitted to disclose the settlement information.  Lawyer A has a claim for quantum meruit recovery from the proceeds of the matter and may file that claim against either the client or Lawyer B.  If Lawyer A files a claim against Lawyer B, Rule 1.6(b)(6) will allow Lawyer B to disclose the information in order “to respond to allegations in any proceeding concerning the lawyer’s representation of the client.”

If you wish to respond or otherwise offer a guest contribution discussing this proposed ethics opinion, please contact the ethics editor at culawobserver@email.campbell.edu.

Tripp Huffstetler, Senior Staff Writer
About Tripp Huffstetler, Senior Staff Writer (57 Articles)
Tripp Huffstetler served as the Senior Ethics Staff Writer for the Campbell Law Observer. He is originally from Cherryville, North Carolina. In 2011, Tripp graduated from the University of North Carolina at Chapel Hill with a bachelor’s degree in Philosophy as well as Political Science. During his undergraduate studies, Tripp spent summers assisting at a practice in his hometown of Cherryville. During law school he interned with the Hon. Kris Bailey, District Court Judge; Judge Paige Phillips, Wake County Magistrate; the Hon. Paul C. Ridgeway, Superior Court Judge; and the Wake County District Attorney's Office. He also assisted a local attorney in drafting a guide to interlocutory appeals, which will be published by the North Carolina Bar Association. Tripp graduated from Campbell Law School in May 2014.
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