A lawyer is representing a client in a complex business negotiation. During a private conversation, the client confides that he intentionally misrepresented certain financial figures to the opposing party, which could lead to a fraudulent contract. The client instructs the lawyer to continue with the negotiation as if no misrepresentation occurred. The lawyer knows that continuing would involve assisting in a fraudulent act. What is the lawyer's most appropriate course of action?
- AAdvise the client to correct the misrepresentation, and if the client refuses, inform the court of the client's intent to commit fraud.
- BDisclose the client's misrepresentation to the opposing party to prevent the fraudulent contract.
- CContinue the representation as instructed by the client, maintaining client confidentiality.
- DWithdraw from the representation, and if necessary, make a 'noisy withdrawal' to signal disaffirmance of any opinion, document, or affirmation.
Show answer & explanationAnswer & explanation
Correct answer: D. Withdraw from the representation, and if necessary, make a 'noisy withdrawal' to signal disaffirmance of any opinion, document, or affirmation.
A lawyer cannot assist a client in conduct the lawyer knows to be criminal or fraudulent. If the client insists on such conduct, the lawyer must withdraw. If the lawyer's services have been used to commit a past fraud or the client intends to commit a future fraud in which the lawyer's services would be implicated, a 'noisy withdrawal' might be permitted or required to disaffirm prior representations and prevent the fraud, while still trying to maintain confidentiality as much as possible.
Why the other options are wrong
- A. While advising the client is correct, informing the court of the client's intent to commit fraud is generally not permitted under confidentiality rules unless an exception applies, such as to prevent death or substantial bodily harm.
- B. Generally, a lawyer cannot disclose client confidences, even to prevent fraud, unless specific exceptions apply (e.g., to prevent death or substantial bodily harm). 'Noisy withdrawal' is more appropriate.
- C. Continuing representation would constitute assisting in a fraudulent act, which is impermissible.
Mandatory Withdrawal (Client Fraud)
A lawyer must withdraw from representation if the client insists upon taking action that the lawyer knows is criminal or fraudulent, or if the lawyer's services would be used to further a crime or fraud.
- Lawyer cannot assist client in criminal/fraudulent conduct.
- Must withdraw if client insists on such conduct.
- May be permitted/required to make 'noisy withdrawal' to disaffirm prior work if necessary to prevent fraud.
Memory trick: No Aid to Crime, Withdraw and Disaffirm.