Can a lawyer defend a criminal client when the witnesses against him are officers of a company the same lawyer also represents, if everyone knows and consents?

Plain-English summary

The inquirer had formerly represented an out-of-state insurance company in defending negligence claims against its policyholders in New Jersey. After that company went into receivership, a second company assumed and defended the actions under a reinsurance treaty, and the inquirer now represented the second company. The former secretary of the insolvent company, indicted with its former president for S.E.C. violations and mail fraud, retained the inquirer to defend him in the criminal case. Discovery revealed that certain officers of the insolvent company, now officers of the second company, were the main witnesses against the inquirer's client and would likely testify for the government. The inquirer asked whether representing the former secretary while representing the present company exposed him to a conflict, noting that he had disclosed the dual representation and that both the client and the new company were aware of it.

The Committee analyzed the question under Canons 6 and 37 of the Canons of Professional Ethics, the first concerning conflicting interests and the second concerning client confidences. It found Canon 6 was not violated because there had been complete disclosure to the client, the former secretary. It found Canon 37 was not violated because the lawyer had obtained no confidences in his former representation of the insolvent insurance company (he stated he learned nothing about the company's inner workings or the alleged S.E.C. or mail-fraud violations) that could adversely affect either the criminal defense or his continued defense of the negligence actions. Distinguishing its Opinion 57 (where a partner could have obtained usable information) and its Opinion 154 (suing a former client in an unrelated matter), the Committee concluded that counsel may continue to represent the former secretary in connection with the federal indictment.

Currency note

This opinion was issued in January 1971, before New Jersey's September 13, 1971 adoption of the Disciplinary Rules (Code of Professional Responsibility), so the Committee was applying the Canons of Professional Ethics and its own prior opinions. It also predates the 1984 Rules of Professional Conduct and all later revisions. The conflict-of-interest and confidentiality principles it applied are now treated under RPC 1.7 and RPC 1.9. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule or requirement mentioned here.

Common questions

Q: Can the same lawyer represent a client and the people testifying against him?

A: On these facts, yes. The Committee allowed the lawyer to defend the criminal client while representing the company whose officers were witnesses, given full disclosure and no usable confidences.

Q: What two Canons did the Committee weigh?

A: Canon 6 (conflicting interests), satisfied by complete disclosure to the client, and Canon 37 (client confidences), not violated because the lawyer had obtained no confidences usable against the client.

Q: When would the result have been different?

A: The Committee distinguished its Opinion 57, where a partner could have obtained information usable against the adverse party, indicating a conflict turns on whether usable confidences exist.

Background and rules framework

The opinion applied Canons 6 and 37 of the Canons of Professional Ethics, turning the analysis on disclosure and consent and on whether the lawyer held confidences from a prior representation that could be used adversely. In current New Jersey terms the analysis falls under RPC 1.7 and RPC 1.9.

Citations and references

Rules of Professional Conduct:

• Canon 6 and Canon 37, Canons of Professional Ethics, as in effect 1971; now MR 1.7 / 1.9 and NJ RPC 1.7 / 1.9

Other opinions cited:

• NJ ACPE Opinion 42, 87 N.J.L.J. 285 (1964); Opinion 57, 87 N.J.L.J. 737 (1964); Opinion 154, 92 N.J.L.J. 353 (1969)

Other authorities:

• Drinker, Legal Ethics 112 (1953)

See also

• NJ ACPE Op. 216: Representing a Wife Against a Former Husband-Client
• NJ ACPE Op. 211: Acting Against a Former Corporate Client
• NJ ACPE Op. 234: Defending a Former Client's Codefendant

Source

• Full text (Justia mirror): https://law.justia.com/cases/new-jersey/advisory-committee-on-professional-ethics/2004/acp194-1.html
• Issuing authority: New Jersey Supreme Court Advisory Committee on Professional Ethics, via the NJ Courts Supreme Court Committees page

Original opinion text

Reproduced from a full-text mirror of the official opinion for research purposes. The linked official source controls.

94 N.J.L.J. 44, January 21, 1971

OPINION 194

Conflict of Interest Representing Client and Witnesses Against Him

The inquirer states that he formerly represented an out-of-state insurance company in the defense of negligence claims against its policyholders in New Jersey. The company was placed in receivership in its state and, under a reinsurance treaty between it and another company, this second company has assumed and is defending the actions. The inquirer is now representing the second company.

The former president and secretary of the insolvent company have been indicted by a federal grand jury for S.E.C. violations and mail fraud. The inquirer has been retained by the former secretary to defend him in the criminal action. The latter is familiar with the fact that counsel is defending claims for the second insurance company.

In the course of discovery proceedings in the criminal case, it has been revealed that certain officers of the insolvent company, who now are officers of the second insurance company, were the main witnesses against the inquirer's client during the grand jury proceedings and presumably will be witnesses for the government when the case goes to trial. The attorney inquires whether he is exposing himself to a conflict of interest charge in representing the former secretary while representing the present company, whose officers will be testifying against his client. He has advised them of his representation of the former secretary, who, as noted above, is already aware of the attorney's continued representation of the second insurance company.

We said, in Opinion 42, 87 N.J.L.J. 285 (1964), that a lawyer should never accept a retainer where his position may be adverse to that of a former client, without taking extreme care to make certain that the new matter is one which will not affect in any way any confidential information that he may have obtained in his former relationship. In his former representation of the insolvent insurance company in the defense of negligence claims, the inquirer says that he obtained no confidential information with respect to the inner workings of that company, nor any information relating to the alleged S.E.C. or mail fraud violations.

This is not such a situation as was present in our Opinion 57, 87 N.J.L.J. 737 (1964), where we found that a conflict did exist when an attorney who had represented a husband in connection with difficulties with his wife was a partner in a law firm which thereafter proposed to defend a suit brought by the wife as a result of the wrongful death of the husband, with whom she had become reconciled. We said there that the one partner might have obtained information in his representation of the husband which could be used against the wife in the death case in order to prove that the marital relationship between the parties had been a stormy one, thus perhaps limiting the amount of damages which she could recover. Nor is this a case of suing a former client in an unrelated matter, which we dealt with in Opinion 154, 92 N.J.L.J. 353 (1969), where we said that a lawyer may bring suit against a former client if the representation of the former client has ended and the matter does not involve confidential communications. Drinker, Legal Ethics (1953) 112.

As we noted above, counsel points out that both his client (the former secretary) and the other defendant (the former president of the insolvent insurance company) are completely aware of his relationship with the new company but that, nevertheless, his client insists that he continue to represent him. And, the new company is also aware of the situation.

It seems to us that Canons of Professional Ethics, Canons 6 and 37 are involved in this problem, the first having to do with conflicting interest and the second with confidences of a client. Canon 6 is not violated because there has been a complete disclosure of the situation to the client (the former secretary).

It seems clear that Canon 37 has not been violated because there are no confidences which this attorney obtained which could adversely affect his representation of the defendant in the criminal case nor his continued representation of the new insurance company in the defense of the negligence action.

We, therefore, conclude that counsel may continue to represent the former secretary of the company in connection with the federal indictment.