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Ethics Opinions from the Bar Association of San Francisco

OPINION 1977-1

The California Rules of Professional Conduct impose no duty upon California attorneys to report a known impropriety of another attorney to the appropriate agencies. However, moral and ethical consideration aside from the Rules would seem to dictate that such an obligation may be proper.

QUESTION:

Is there a duty for a California attorney to disclose a violation by another California attorney of California Rules of Professional Conduct, Rule 2-108, involving referral fees?

OPINION:

The California Rules of Professional Conduct impose no duty upon California attorneys to report a known impropriety of another attorney to the appropriate agencies. This does not state that an attorney may not report an impropriety of a fellow attorney and, in fact, the moral and ethical considerations aside from the Rules would seem to dictate that such an obligation may be proper.

DISCUSSION:

To adequately answer the above question, based upon a fact situation wherein an attorney receives a substantial referral fee in excess of the time, effort and work involved in participation in a personal injury case, there must be an examination of the California Rules of Professional Conduct with reference to the ABA Code of Professional Responsibility.

The appropriate section of the California Rules of Professional Conduct is Rule 2-108, Division of Fees Among Lawyers. That particular section clearly makes it improper for an attorney to divide a fee for his legal services unless it is based upon three criteria:

One, that the client consents to the employment of the other attorney and has been given a full disclosure of the division of fees.

Two, that the division is made in proportion to the services performed or responsibility assumed by each, and

Three, that the total fee is not increased by reason of any division of fees.

The particular subdivision which is in constant violation is subdivision two, dealing with a division being made in proportion to the services performed or the responsibility assumed by each. When an attorney is given a one-third referral fee for referring a personal injury case to another attorney, with no basis in fact or reference to the services performed or the responsibility assumed, this is clearly a violation of Rule 2-108.

The fact that this particular practice is clearly a violation of the California Rules of Professional Conduct brings us to the crux of the query, i.e., whether there is a duty on the part of an attorney aware of such improprieties to take steps appropriate in seeing that the proper agencies are apprised of the existing impropriety.

The ABA Code of Professional Responsibility Section 1-103 provides: "Disclosure of Information to Authorities, DR 1-103."

"(a). A lawyer possessing unprivileged knowledge of a violation of DR 1-102 shall report such knowledge to a tribunal or other authority empowered to investigate or act upon such violation.

(b). A lawyer possessing unprivileged knowledge or evidence concerning another lawyer or a judge shall reveal fully such knowledge or evidence upon proper request of a tribunal or other authority empowered to investigate or act upon the conduct of lawyers or judges."

That section of the ABA Code of Professional Responsibility clearly answers the question in the affirmative. Canon I of the ABA Rules further contains DR 1-102 "Misconduct" which states:

(A) A lawyer shall not:

  1. Violate a Disciplinary Rule.
  2. Circumvent a Disciplinary Rule through action of another.
  3. Engage in illegal conduct involving moral turpitude.
  4. Engage in conduct involving dishonesty, fraud, deceit or misrepresentation
  5. Engage in conduct that is prejudicial to the administration of justice.
  6. Engage in any other conduct that adversely reflects on his fitness to practice law.

California Rules of Professional Conduct unfortunately do not make reference to disclosure of information to authorities by an attorney who was aware of the violation of a disciplinary rule.

If the American Bar Association Code of Professional Responsibility were binding or authoritative, there would in fact be a duty to disclose any and all improprieties of a fellow attorney. The ABA Code was designed to be adopted by appropriate agencies, both as a guide to members of the legal profession and as a basis for disciplinary action when the conduct of a lawyer falls below the required minimum standards stated in the disciplinary rules.

However, the ABA Code of Professional Responsibility has no binding effect on California Attorneys. California has adopted its own Rules of Professional Conduct with the appropriate current revisions. The 1974 revision followed the format of the ABA Code of Professional Responsibility and many of the rules incorporated into the California Rules were derived from the ABA Code.

Disciplinary Rule 1-103 of the ABA Code was not incorporated into the California Rules of Professional Conduct. The fact that it was not incorporated, is not an indication that the California State Bar Board of Governors disagreed that there is a duty to disclose known improprieties of attorneys.

California Rules of Professional Conduct, Rule 1-100 quotes in part ".The prohibition of certain conduct in these rules is not to be interpreted as an approval of conduct not specifically mentioned." This simply means that certain conduct, though not specifically set forth as being unprofessional, is such conduct that may be deemed unprofessional and subject to disciplinary action. The fulfillment of the role of attorneys in the preservation of society requires an understanding by attorneys of their relationship with their function within the legal system, and a consequent obligation of attorneys to maintain the highest standards of ethical conduct.

The attorney does have an obligation as an officer of the Court and a duty to disclose any and all known improprieties as an officer of the court. See Ruszovan v. Ruszovan (1969) 268 Cal.App.2d, 74 Cal.Rptr. 507. The courts have been delegated the duty of protecting the public and in seeking this aim the Rules of Professional Conduct were promulgated. The Rules of Professional Conduct are intended not only to establish ethical standards for members of the bar but are designed to protect the public from the legal profession. Ames v. State Bar (1973) 8 Cal.3d 910, 106 Cal.Rptr. 489.

The Supreme Court in Reznik v. State Bar (1969) 1 Cal.3d 198, 81 Cal.Rptr. 769 stated: ["It is necessary to show that a third person has actually suffered injury or loss by reason of the misconduct of an attorney before imposing disciplinary action?"] The court answered that particular question by stating in part: "The right to practice law may be forfeited upon a showing that a practitioner does not possess the necessary and proper moral qualifications to continue in practice. It is not necessary that actual harm results to merit disciplinary action where actual deception is intended and shown."

California Rules of Professional Conduct do not impose legal obligation to make disclosures of known improprieties of another attorney, however, there is certainly a severe moral qualification which needs to be considered.

Based upon the foregoing is the legal conclusion that there is no duty upon an attorney to report a known impropriety of another attorney to the appropriate agencies. There obviously is a moral obligation, however, until such time as the legislature and the California State Bar determines that this type of conduct is to be statutorily prohibited, it does not exist.

This further does not state that an attorney may not report an impropriety of a fellow attorney, and in fact, the moral and ethical considerations aside from the statutory law would seem to dictate that such an obligation may be proper.

 

All opinions of the Committee are subject to the following disclaimer:
Opinions rendered by the Ethics Committee are an uncompensated service of The Bar Association of San Francisco. Opinions are advisory only, and no liability whatsoever is assumed by the Committee or The Bar Association of San Francisco in rendering such opinions, and the opinions are relied upon at the risk of the user thereof. Opinions of the Committee are not binding in any manner upon the State Bar of California, the Board of Governors, any disciplinary committee, The Bar Association of San Francisco, or the individual members of the Ethics Committee.

In using these opinions you should be aware that subsequent judicial opinions and revised rules of professional conduct may have dealt with the areas covered by these ethics opinions.

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