CBA Record Sept. 2016

48 / 60

48 SEPTEMBER 2016
LEGAL ETHICS
BY JOHN LEVIN
CONTINUING DEVELOPMENTS ON A LAWYER’S DUTY TO DISCLOSE
Reporting Up or Out
In October 2003, this column discussed
the brewing battle over attorney-client
privilege under the then-newly adopted
Sarbanes-Oxley Act. Pursuant to the Act,
the SEC adopted regulations obliging
a lawyer to report and disclose certain
client actions, primarily to prevent the
client from committing fraud and criminal
violations. TheWashington State Bar Asso-
ciation issued an Interim Formal Ethics
Opinion finding that certain disclosure
requirements under the SEC Rules were
broader than those permitted under the
Washington Rules of Professional Con-
duct, and a Washington lawyer could not
reveal such protected confidences. This
resulted in an exchange of letters between
the SEC and the bar associations of several
states over the issue.
The column anticipated further devel-
opments on the issue of an attorney’s duty
to disclose, stating at that time:
The SEC–as well as other governmental
agencies–has long been attempting to push
the legal profession toward having a public
enforcement function. Such a function not
only would force lawyers to violate long
held confidentiality obligations to their
clients, but would contravene the funda-
mental concept that the lawyer owes his or
her obligation first to the client–not to the
public.…Stay tuned for further develop-
ments.
John Levin is the retired Assis-
tant General Counsel of GATX
Corporation and a member of
the CBARecord Editorial Board.
John Levin’s Ethics columns,
which are published in each
CBA Record, are now in-
dexed and available online.
For more, go to
legalethics/.
The first “further developments” were
amendments to ABAModel Rules 1.6 and
1.13 (adopted in most states, including
Illinois, though with some local varia-
tions). As reported in the ABA Bar Leader
in December 2003:
By a 218-201 vote, the ABA Del-
egates amended Model Rule 1.6(b)
to permit a lawyer to reveal confi-
dential client information to prevent
a crime or fraud that is reason-
ably certain to result in substantial
injury to the property or financial
interest of another. The ABA also
voted to amend Model Rule 1.13 to
require a corporate lawyer to report
certain violations of law by officers
or employees to higher authorities
within the organization, unless the
lawyer believes that disclosure would
not be in the best interest of the
organization.
The general concept underlying these
rules is that the lawyer’s client is the entity,
and the duty of the lawyer is to protect
the interests of the entity even if it may
be against the personal interests of certain
officers or employees of the entity,
The compromise between the ABA
and the SEC seemed to work. But what if
the lawyer does not “report up” or “report
out” such information? This was the ques-
tion brought in 2016 before the Michigan
Attorney Grievance Commission concern-
ing six former General Motors in-house
counsel who failed to disclose either “up”
or “out” information they allegedly had
about defective ignition switches in GM
cars that resulted in numerous injuries
and deaths. As reported in the public
media and trade press, the Grievance
Commission declined to commence any
disciplinary action against these lawyers
after a complaint was filed by the father
of an alleged victim. The Commission
did not give reasons for taking no action,
and there has been speculation–much of
which revolves around the specific wording
Michigan’s Rules of Professional Conduct,
which gives attorneys very limited discre-
tion to disclose client confidences, even if
necessary to prevent death or bodily injury.
Can an Illinois lawyer rely onMichigan’s
“no action” decision? I would suggest that
the answer is No. Illinois Rule 1.6(c) states
that: “[a] lawyer shall reveal information
relating to the representation of a client to
the extent the lawyer reasonably believes
necessary to prevent reasonably certain
death or substantial bodily harm.” Com-
ment 6 to Illinois Rule 1.6 is fairly explicit
in stating:
Paragraph (c) recognizes the overriding
value of life and physical integrity and
requires disclosure reasonably necessary
to prevent reasonably certain death or
substantial bodily harm…Thus, a lawyer
who knows from information relating to a
representation that a client or other person
has accidentally discharged toxic waste into
a town’s water must reveal this information
WHAT’S YOUR OPINION?
Send your views to the CBA Record, 321
South Plymouth Court, Chicago, IL 60604, or
zine reserves
the right to edit letters prior to publishing.
continued on page 56