Separate but Equally Important: Duties of Confidentiality and Loyalty
LACBA Update, August 2010
By Lisa Miller and Robert Sainburg. Lisa Miller is a member of the LACBA Professional Responsibility and Ethics Committee and a trustee of the San Fernando Valley Bar Association. She can be reached at (818) 802-1709 or Lisa@LMillerconsulting.com. Robert Sainburg is a member of the LACBA Professional Responsibility and Ethics Committee. He may be reached at (818) 550-5001 or firstname.lastname@example.org. The opinions expressed are their own.
For decades, counsel and the courts have wrestled with the relationship between counsel’s fundamental obligations to maintain confidentiality and undivided loyalty to all of their clients. These concepts are often conflated, and it is important for attorneys to understand their distinct obligations under each.
Duty of Confidentiality
The duty of confidentiality is fundamental to the attorney-client relationship. It recognizes the fiduciary relationship pursuant to which clients regularly divulge confidential information and share secrets with their counsel. This duty of secrecy is broader than the attorney-client privilege.
Generally, "secrets" include information that the client has requested be held inviolate, or the disclosure of which would be embarrassing or likely to be detrimental to the client. Attorneys are obligated to preserve the secrets of their clients even at their own detriment. As a result, counsel may not reveal confidential information relating to the representation of a client (except as permitted or required by law or applicable ethics rules).
Duty of Loyalty
An attorney owes a duty of undivided loyalty to each and every client. The duty of loyalty is the underlying principle at stake in conflict of interest situations involving concurrent representations. This principle precludes representation of a client whose interests are adverse to the interests of a current client.
The reason that representation of clients with conflicting interests is prohibited is to protect public confidence in the attorney-client relationship as well as internal integrity. Lay clients are likely to doubt the loyalty of a lawyer who undertakes to oppose them even in an unrelated matter. Hence the courts and ethical codes alike condemn acceptance of a representation adverse to a client even when the engagement is unrelated to the existing representation. The policy concern behind the condemnation is the client's loss of confidence in his or her counsel, not the attorney's inner conflicts. Thus, the ban on concurrent representation of conflicting client interests is directed at preserving the attorney's duty of loyalty, not the duty of confidentiality, to the client.
Application of the Concepts
The California Supreme Court analyzed these concepts in Flatt v. Superior Court.1 In Flatt, counsel met with a prospective client and obtained confidential information and documents regarding a possible lawsuit. After the meeting, counsel discovered that the target of the lawsuit was an existing client of her firm. Counsel immediately informed the prospective client that she could not represent him because she had a conflict of interest. Counsel did not advise the prospective client about the applicable statute of limitations or advisability of seeking alternative counsel. The prospective client later sued after failing to consult another attorney prior to the expiration of the statute of limitations.
The court found counsel's duty of loyalty, owed to her current client, eclipsed any obligation to advise the prospective client regarding the statute of limitations or the possibility of finding new counsel.2 The holding in Flatt is narrow and applies to the facts therein where counsel had an unwaivable conflict and acted promptly to advise the prospective client of counsel's conflict and inability to provide representation.3
In its discussion, however, the court in Flatt clearly enunciated how the analysis differs when the alleged conflict is based on successive representations as opposed to the concurrent representations faced by the attorney in Flatt.
For example, in a disqualification motion based on a conflict with a current client, the moving party need only show that the lawyer or firm currently represents the client and did not obtain a written waiver of the conflict created by taking on a representation that is adverse to the client. Courts do not require a showing that counsel actually obtained confidential information.4 This is the case even where one matter is completely unrelated to the other.5
The basis for the rule is that counsel's simultaneous representation of parties with conflicting interests undermines the client's expectation of counsel's undivided loyalty. The concept is so important that an individual with a stake in the outcome of pending litigation but who is not a client may move for disqualification. “So inviolate is the duty of loyalty to an existing client that not even by withdrawing from the relationship can an attorney evade it.”6
In contrast, when the conflict is between a current client and a former client, i.e., successive representations, the chief fiduciary value jeopardized is that of client confidentiality. The governing test requires that the client demonstrate a “substantial relationship” between the subjects of the antecedent and current representations.
Disqualification from representation does not rest on any actual breach of the duty of confidentiality. The mere existence of a substantial relationship between the prior and present matters is enough to conclusively presume counsel's possession of confidential information and justify disqualification from the second representation.7
1 Flatt v. Superior Court, 9 Cal. 4th 275 (1994).
2 Id. at 278–79.
3 Id. at 279.
4 Woods v. Sup. Ct., 149 Cal. App. 3d 931 (1983).
5 Flatt, 9 Cal. 4th at 284–86.
6 Id. at 288.
7 Id. at 283.