Does the Duty of Confidentiality Prevent an Attorney from Disclosing a Former Client’s Confidences in a Fee Collection Action?

By Michael C. Starkey, Adler Law Firm

Occasionally an attorney must sue a former client to collect outstanding fees and costs. Often the evidence critical to the attorney’s claim includes the secrets of the former client. May the attorney reveal those confidences necessary to prosecute the collection action?

Duty of Confidentiality: An attorney’s duty to protect client secrets applies to all information relating to client representation, whatever its source. See Business & Professions Code §6068(e)(1); Rules of Professional Conduct, Rule 3-100. That duty persists after the termination of the attorney-client relationship. See Wutchumna Water Co. v. Bailey (1932) 216 Cal. 564, 571.

Self-Defense Exception: The California Rules of Professional Conduct do not contain an express exception permitting an attorney to disclose otherwise confidential information in a dispute with a former client. However, there is persuasive authority that a disclosure in an action against a former client, limited to information relevant to the dispute, is ethically permissible. See The Bar Association of San Francisco Form. Opn. 2014-1 (2014).

First, pursuant to the California Evidence Code, communications relevant to an attorney’s claim for fees are not privileged. Section 958 provides: “There is no privilege under this article as to a communication relevant to an issue of breach, by the lawyer or by the client, of a duty arising out of the lawyer-client relationship.”

California courts have applied Section 958 to overrule privilege objections not just in malpractice cases, but also in actions where the attorney has sued the former client for unpaid fees. See, e.g., Carlson, Collins, Gordon & Bold v. Banducci (1967) 257 Cal.App.2d 212, 227-28. Recently, the Court of Appeal of California, Second Appellate District, held that attorney-client communications were admissible in a fee collection action, even though the defendant’s former co-clients (who were not parties to the collection action) attempted to invoke the privilege. See Anten v. Superior Court (Jan. 30, 2015) 2015 Cal. App. LEXIS 96, 10-11.

Second, since the California rules are silent on the matter, Model Rule 1.6(b)(5) is persuasive as it explicitly permits disclosure of confidences “to the extent the lawyer reasonably believes necessary. . . . . .to establish a claim or defense on behalf of the lawyer in a controversy between the lawyer and the client. . . .”

Third, the Restatement (Third) of the Law Governing Lawyers condones the disclosure of confidential client information “to the extent that the disclosing lawyer reasonably believes it necessary” and expressly endorses disclosure to defend a suit for the disgorgement of already-paid fees. Section 64, cmt. e; see also cmt. c.

Conclusion: While the California Rules of Professional Conduct do not expressly permit disclosure of confidential information to prosecute an action to recover unpaid fees, the Section 958 privilege exception, the Model Rules, and the Restatement (Third) are persuasive that such disclosure is ethically permissible. However, such disclosure must be narrowly tailored to the evidence reasonably necessary to prove the attorney’s claim and/or rebut defenses raised by the former client. See Schlumberger Ltd. v. Sup.Ct. (Kindel & Anderson) (1981) 115 Cal.App.3d 386, 392; Los Angeles County Bar Association Form. Opn. 452 (1988). Broader disclosures may expose the attorney to discipline. See Dixon v. State Bar (1982) 32 Cal.3d 728, 735.

2013-06-04-MikeStarkeyAbout the author:

Mike Starkey is a senior associate at Adler Law Firm, where he practices civil litigation, primarily representing law firms in fees disputes. He is a member of BASF’s Legal Ethics Committee.