RPC 1.7 - Conflict of Interest Current Clients

• Proposed Changes to RPC 1.7 - Conflict of Interest Current Clients (in Word Format)
• No comments are available at this time.

A. Name of Proponent: Washington State Bar Association.

B. Spokepersons:

Bradford E. Furlong, President, Washington State Bar Association, 1325 4^th Avenue, Suite 600, Seattle, WA 98101-2539

Jeanne Marie Clavere, Professional Responsibility Counsel, Washington State Bar Association, 1325 4^th Avenue, Suite 600, Seattle, WA 98101-2539

C. Purpose:

The purpose of the suggested amendment is to provide lawyers with guidance on consent to future conflict waivers under Washington RPC 1.7, Comment [22], which is currently reserved. Consideration of the issue was initiated by the Washington State Bar Association’s (WSBA) Committee on Professional Ethics (CPE) which recommended that it be addressed in the RPC. See CPE Rule of Procedure 4 (Source of Issues).¹

When the Supreme Court adopted revisions to Washington’s Rules of Professional Conduct in 2006, it neither expressly adopted nor expressly rejected official Comment [22] to American Bar Association (ABA) Model Rule 1.7. It also chose not to present a different view. Since this time, Washington lawyers have been without guidance from the court on whether or when waivers of future conflicts may be effective.

ABA Model Rule 1.7, Comment [22] provides:

[22] Whether a lawyer may properly request a client to waive conflicts that might arise in the future is subject to the test of paragraph (b). The effectiveness of such waivers is generally determined by the extent to which the client reasonably understands the material risks that the waiver entails. The more comprehensive the explanation of the types of future representations that might arise and the actual and reasonably foreseeable adverse consequences of those representations, the greater the likelihood that the client will have the requisite understanding. Thus, if the client agrees to consent to a particular type of conflict with which the client is already familiar, then the consent ordinarily will be effective with regard to that type of conflict. If the consent is general and open-ended, then the consent ordinarily will be ineffective, because it is not reasonably likely that the client will have understood the material risks involved. On the other hand, if the client is an experienced user of the legal services involved and is reasonably informed regarding the risk that a conflict may arise, such consent is more likely to be effective, particularly if, e.g., the client is independently represented by other counsel in giving consent and the consent is limited to future conflicts unrelated to the subject of the representation. In any case, advance consent cannot be effective if the circumstances that materialize in the future are such as would make the conflict nonconsentable under paragraph (b).

Although it does not appear that this court or the Washington Court of Appeals has issued any opinions that address the question whether future conflicts can be waived, courts in many other jurisdictions have done so. And while there are opinions that accept or reject particular future conflicts waivers in particular circumstances, there does not appear to be any current authority in any jurisdiction holding that all future waivers are per se or inherently unenforceable. See, e.g., Lennar Mare Island, LLC v. Steadfast Ins Co, 105 F. Supp. 3d 1100 (E.D. Cal. 2015) (rejecting waiver); Galderma Lab LP v. Actavis Mid Atl. LLC, 927 F. Supp. 2d 390 (N.D. Tex. 2013) (accepting waiver); Visa U.S.A., Inc. v. First Data Corp., 241 F. Supp. 2d 1100 (N.D. Cal. 2003) (accepting waiver).

As these and many other cases show, the enforceability of future waivers depends in each case on factors including but not limited to whether the client is separately represented in the granting of consent, the legal sophistication of the client, the adequacy of disclosure of pertinent risks in light of subsequent events, and the standard factors for assessing the effectiveness of present waivers, such as whether the lawyer in question could subjectively and reasonably believe that the lawyer could provide competent representation to all. Geoffrey C. Hazard, W. William Hodes & Peter R. Jarvis, The Law of Lawyering §§ 12.34-12.36 (4th Ed. 2015); Peter Jarvis, Allison Martin Rhodes & Calon Russell, Clearly Enforceable Future Conflicts Waivers, 30 ABA/BNA Law. Manual Prof. Conduct 692 (Oct. 22, 2014).

Official Comment [22] fairly reflects both the trend in the law and the kinds of factors that must be considered in assessing the effectiveness of future waivers. To the best knowledge of the CPE, there are in fact no states in which there is case law, a black letter rule or an official comment that expressly bars all future conflicts waivers.

The adoption of official Comment [22] will prompt Washington lawyers to analyze when and whether to attempt to obtain and rely upon a future conflicts waiver. In the absence of any Washington case law or any official comments on the subject, Washington lawyers may not adequately or fully appreciate the circumstances or conditions that must be met before a future conflicts waiver can be said to be effective. In addition, if the Court were to take the contrary position that future waivers are never allowed, Washington-based lawyers and firms would find themselves at a considerable disadvantage in attempting to conduct multistate practices. Finally, it is the opinion of the CPE that future waivers constitute an important and necessary part of respect for client autonomy.

D. Hearing: A hearing is not requested.

E. Expedited Consideration: Expedited consideration is not requested.

F. Supporting Material: Suggested Rule Amendment

¹ Source of Issues. The Committee may issue Advisory Opinions on significant legal ethics issues. Members of the Committee, as coordinated by the Chair, are expected to research and identify legal ethics issues of relevance to the WSBA membership and bring them to the attention of the Committee. The Committee identifies issues on which it will express its opinion. In identifying issues, the Committee may consider inquiries and suggestions submitted by members of the Bar, by Bar Sections, by lawyer professional organizations, by the Board of Governors, and by Bar staff, and it may pursue issues on the Committee’s own initiative. The Committee’s selection of issues may be guided by the breadth of relevance of an issue to members of the Bar, the significance of the issue and its potential effects on members of the Bar and the public, the likelihood of recurrence of an ethics issue, and the existence or absence of prior guidance on the issue (including whether that guidance is consistent). The Committee may also take into account the diversity of law practices in the State of Washington, including differences in geography, practice types, client bases, and levels of experience and sophistication. The Committee will generally avoid known instances of pending litigation, disciplinary proceedings, or other disputes.