February 2, 1983
A lawyer may represent a client against a former client only when all business relations have ceased between lawyer and client, the subject matter is new, and the information upon which the lawyer proceeds did not come from the former employment.
A lawyer's representation of one client against a former client in any matter arising from the same subject matter is prohibited, even if the former client assents to the representation.
References: MCPR Canon 9, DR 4-101(B), DR 5-101; CI-354, CI-432, CI-508, CI-518, CI-811, CI-820, CI-840; ABA i885.
A physician asked a lawyer to pursue workers' compensation benefits for a member of the medical staff who had contracted hepatitis. The insurance carrier rejected the claim. The physician felt strongly that the employee should be compensated and asked the lawyer to file a petition for determination of rights on behalf of the physician so as to obtain these claimed benefits for the employee. The insurance company filed a motion to dismiss, the administrative hearing officer heard the motion and indicated it would be granted, and the lawyer withdrew the petition.
Subsequently the claimant asked the lawyer to file a petition for benefits on their behalf. After consultation, the physician concurred, even though the petition would name the physician and the insurance company as defendants. The lawyer asks about the propriety of the representation.
MCPR DR 4-101(A) provides that a lawyer should preserve the confidences and secrets of a client. MCPR DR 5-101 provides that a lawyer should exercise independent professional judgment on behalf of a client. MCPR Canon 9 provides that a lawyer should avoid even the appearance of professional impropriety.
CI-354 dealt with the issue of representing a client against a former client, and states:
"The general rule is set forth in Op 7. There is no ethical prohibition against representing a client against a former client of the lawyer provided the business relations between the lawyer and the former client have ceased. But, such representation would be improper if the lawyer had represented the former client involving the same subject matter or if the lawyer had been in a situation or position with the former client to have actually gained or been in a position to gain information on which to proceed in the present case. This would be a breach of a confidential relationship." Emphasis added.
ABA i885 reasoned:
"An attorney should not accept litigation against a former client under any circumstances if such would result in conflict of interests or disclosure of confidences of the former client, and in such a situation a court is justified in enjoining a lawyer from proceeding with the litigation against the former client. Moreover, the lawyer should avoid representation of a party in a suit against a former client where there may be the appearance of conflict of interest or a possible violation of confidences, even though such may not in fact exist." Emphasis added.
In CI-432, a lawyer wished to set aside a conveyance in a bankruptcy action. Previously the lawyer had advised the former client about this conveyance. The was clearly in conflict with MCPR DR 4-101(B), which requires that the lawyer preserve the confidences and secrets of a client. The opinion stated:
"As the lawyer has some information about the issue which the lawyer is now contesting, such an action is improper.
"This is true even assuming that the former client consents (which he has not) or assuming that the lawyer has no specific confidences to reveal. CI-250, CI-257. See also ABA i885.) The necessity to avoid even the appearance of impropriety precludes the lawyers involvement in this matter. See Canon 9." Emphasis added.
The opinion concluded that a lawyer may represent a client against a former client only when all business relations have ceased between lawyer and client, the subject matter is new, and the information upon which the lawyer proceeds did not come from the former employment. It is especially inappropriate to do this when the representation arises from the same transaction or occurrence.
In CI-508, a lawyer for a labor union was instructed to bring suit on its behalf and on behalf of an employee who had failed an employment examination. After initiating the suit, the lawyer advised the union that the lawyer did not feel the likelihood of success was great. The union authorized the lawyer not to proceed further. The lawyer advised the employee that the union was not going to proceed further with the suit and that the employee should secure other counsel to proceed further. The employee's new counsel advised bringing an action against the union on a negligence theory. The union asked the original lawyer to defend it in the suit. The opinion stated that the lawyer should not participate for the following reasons:
"Involved in a full consideration of this problem is the provision of Canon 5, at DR 5-105(c), which provides for continued representation of multiple clients if there is full and informed disclosure. While that Canon must be considered, it is not determinative of the result here. That Canon and Disciplinary Rule refers to multiple present clients, while in the hypothetical case above, we are faced with present and past clients. Further it does not appear that DR 5-105 addresses itself to or allows lawyers to 'switch sides.' There is the appearance of that type of problem in the hypothetical above."
In CI-518 a lawyer for two co-plaintiffs could not, upon the dismissal of one of them from the pending litigation, name that party as a co-defendant in a related claim arising from the same transaction. CI-811 stated that a city law department could not represent both the city council and mayor in litigation to resolve the controversy even if both adverse parties consented to the dual representation. CI-820 states that it is inappropriate for a lawyer who has represented the estates of a husband and wife to cease the representation of one estate for the purpose of bringing an action against that estate on behalf of the other estate. CI-840 concluded it is improper for a lawyer, formerly guardian ad litem for husband in guardianship proceedings initiated by the wife, to represent the wife in matters related to assets of the ward, despite the release of the lawyer as guardian ad litem.
These opinions indicate a strong policy to prohibit a lawyer's representation of one client against a former client in any matter arising from the same subject matter which underlay the previous representation. CI-518, CI-508.
Although the lawyer states that the only issue that has ever existed in this case is the employee's entitlement to benefits, careful attention must be paid to Canon 9 which provides that a lawyer should avoid even the appearance of professional impropriety. In this case, the relationship between employer, employee and lawyer could give the impression of professional impropriety even though there may be no actual impropriety.