Must a Mississippi lawyer disclose a Mary Carter agreement to the court and opposing counsel even if it has not been sought in discovery?

Plain-English summary

The Committee addressed a situation where one of two defendants proposed a so-called "Mary Carter Agreement" with the plaintiff: the defendant would pay the plaintiff a fixed sum and cooperate in proving the plaintiff's case, the plaintiff would agree not to execute on any judgment against that defendant, and the defendant would remain a party in the case.

The opinion stated the Committee was precluded from addressing the many legal questions about the validity and propriety of Mary Carter agreements and expressed no opinion on their legality. It addressed only the professional-conduct dimension. The opinion concluded that Rules 3.3 and 4.1 prohibit a lawyer from making false statements or failing to disclose material facts where disclosure is necessary to avoid assisting a client's fraudulent act, and that failing to disclose the existence and terms of such an agreement could be misleading and deceptive to opposing counsel and the court, citing ABA Informal Opinion 1386.

The opinion concluded that, to comply with the intent of the ethical rules, an attorney has a duty to disclose the existence and terms of a Mary Carter agreement to opposing counsel and the court, whether or not it has been requested in discovery. If that is done, the opinion concluded, participating in consummating such an agreement would generally not be prohibited by the Mississippi Rules of Professional Conduct.

Currency note

This opinion was issued in 1989, before the adoption of the current Mississippi Rules of Professional Conduct effective June 22, 1994 (amended February 5, 1999), though it cited Rules 3.3 and 4.1 numbered as in the current rules. Mississippi did not adopt the ABA's 2002 Ethics 2000 revisions wholesale, and subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Must a lawyer disclose a Mary Carter agreement even if no one asks for it in discovery?

A: The opinion concluded yes. It found a duty to disclose the existence and terms of such an agreement to the court and opposing counsel regardless of whether it was requested in discovery.

Q: Did the opinion decide whether Mary Carter agreements are legal?

A: No. The opinion stated the Committee was precluded from addressing the validity or legality of such agreements and expressed no opinion on it, addressing only the disclosure duty.

Q: Can a lawyer participate in a Mary Carter agreement at all?

A: Per the opinion, participating in consummating such an agreement would generally not be prohibited by the Mississippi rules, provided the existence and terms are disclosed to the court and opposing counsel.

Background and rules framework

The opinion interprets Mississippi Rules 3.3 (candor toward the tribunal) and 4.1 (truthfulness in statements to others), corresponding to Model Rules 3.3 and 4.1. It read those rules to bar false statements and material nondisclosure where disclosure is necessary to avoid assisting a client's fraud, and applied that to the nondisclosure of a Mary Carter agreement, citing ABA Informal Opinion 1386.

Citations and references

Rules of Professional Conduct (Mississippi; cf. Model Rules):

• MRPC 3.3 (candor toward the tribunal) (cf. Model Rule 3.3).
• MRPC 4.1 (truthfulness in statements to others) (cf. Model Rule 4.1).

Other opinions cited:

• ABA Informal Opinion 1386: nondisclosure of a settlement arrangement as misleading.

See also

• MS Bar Ethics Op. 205: Duty to Disclose Perjury to the Tribunal
• MS Bar Ethics Op. 200: Speaking With a Client About Testimony During a Recess

Source

• Landing page: https://www.msbar.org/ethics-discipline/ethics-opinions/formal-opinions/161/
• Original PDF: https://www.msbar.org/media/1439/35a_et_op_161.pdf

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

ETHICS OPINION NO. 161

OF THE MISSISSIPPI BAR

RENDERED March 17, 1989

MARY CARTER AGREEMENT- The existence of a Mary Carter Agreement should be disclosed to the court and opposing counsel.

The Ethics Committee of the Mississippi State Bar has been asked to render an opinion on facts which may be summarized as follows:

One of two defendants proposes to enter into a so-called "Mary Carter Agreement" with the plaintiff. This agreement would provide that the defendant would pay the plaintiff a fixed sum and would cooperate with the plaintiff in proving the plaintiff's case. In exchange, the plaintiff would agree not to execute upon any judgment rendered against the defendant. The defendant would remain a party in the case.

There are many legal issues concerning the validity and propriety of Mary Carter Agreements which this Committee is precluded from addressing, and we do not express an opinion on the legality of these agreements. However, there are also several rules of professional conduct which affect an attorney's participation in consummating agreements of this nature. Rules 3.3 and 4.1 of the Mississippi Rules of Professional Conduct prohibit attorneys from making statements that are false or failing to disclose material facts, when disclosure is necessary to avoid assisting a fraudulent act by a client. The failure to disclose the existence and terms of a Mary Carter Agreement could be misleading and deceptive to opposing counsel and to the Court. See ABA Informal Opinion 1386. Therefore, it is our opinion that to comply with the intent of the ethical rules an attorney has a duty to disclose the existence and terms of a Mary Carter Agreement to opposing counsel and the court, regardless of whether or not it has been requested in discovery. If this is done, participation in consummating a Mary Carter Agreement would generally not be prohibited by the Mississippi Rules of Professional Conduct.