Can a lawyer use a former client's confidential information to fight discharge of unpaid fees in the client's bankruptcy?

Plain-English summary

After representing a client, the lawyer was listed as a creditor when the client filed bankruptcy, and the lawyer intended to appear in Bankruptcy Court to defend against discharge of his fee claim. The committee was asked whether the lawyer could use confidential information from the client, or public-record information, in pursuing the unpaid-fee claim.

The committee concluded that using public-domain information does not violate the rules, and that a lawyer may also use confidential information obtained from the client to pursue the fee claim. It applied Rule 1.6: while Rule 1.6(a) bars revealing information relating to the representation, Rule 1.6(b) permits disclosure as reasonably necessary in two relevant respects. Under Rule 1.6(b)(1), the lawyer may reveal confidential information to prevent the client from committing a future crime (for example, underreporting assets to the Bankruptcy Court by filing a false federal document); the lawyer should first try to persuade the client not to do so, and may disclose to the court if the client refuses. Under Rule 1.6(b)(2), the lawyer may use confidential information obtained during the representation to establish his claim for the unpaid debt. The committee quoted the Rule 1.6 comment that a lawyer entitled to a fee may prove the services rendered to collect it, but must make every practicable effort to avoid unnecessary disclosure, limit it to those who need to know, and seek protective orders or other arrangements to minimize the risk of disclosure.

Currency note

This opinion was issued in 1993, before the South Carolina Bar's adoption of the 2005 revisions to the Rules of Professional Conduct. 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 Treat this page as historical context, not current guidance.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: Can the lawyer use the client's confidential information to pursue unpaid fees in bankruptcy?

A: The committee concluded yes, under Rule 1.6(b)(2), which lets a lawyer use information to establish a fee claim in a controversy between lawyer and client.

Q: What about information from public records?

A: The committee concluded that using information from the public domain to pursue the fee claim does not violate the rules.

Q: What if the client plans to underreport assets to the bankruptcy court?

A: Under Rule 1.6(b)(1), the lawyer may reveal confidential information to prevent that future crime, after first trying to persuade the client not to commit it.

Background and rules framework

The opinion applied Rule 1.6 (confidentiality of information), including the Rule 1.6(b)(1) exception to prevent a client's future crime and the Rule 1.6(b)(2) self-protection exception for a fee controversy, with the rule's comment limiting disclosure to what is necessary. The South Carolina rule corresponds to like-numbered Model Rule 1.6.

Citations and references

Rules of Professional Conduct:

• South Carolina RPC 1.6 / Model Rule 1.6: confidentiality of information, including the Rule 1.6(b)(1) (prevent future crime) and Rule 1.6(b)(2) (fee controversy) exceptions.

See also

• SC Bar Ethics Op. 94-11: Collecting Unpaid Legal Fees
• SC Bar Ethics Op. 94-23: Self-Defense Disclosure Before an Agency
• SC Bar Ethics Op. 94-24: Disclosure in a Termination Appeal

Source

• Landing page: https://www.scbar.org/for-lawyers/quicklinks/legal-resources/ethics-advisory-opinions/ethics-advisory-opinion-93-38/

Original opinion text

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

UPON THE REQUEST OF A MEMBER OF THE SOUTH CAROLINA BAR, THE ETHICS ADVISORY COMMITTEE HAS RENDERED THIS OPINION ON THE ETHICAL PROPRIETY OF THE INQUIRER’S CONTEMPLATED CONDUCT. THIS COMMITTEE HAS NO DISCIPLINARY AUTHORITY. LAWYER DISCIPLINE IS ADMINISTERED SOLELY BY THE SOUTH CAROLINA SUPREME COURT THROUGH ITS COMMISSION ON LAWYER CONDUCT.

Ethics Advisory Opinion 93-38

After representing a client in a legal matter, the client files bankruptcy and lists the lawyer as a creditor. Lawyer intends to appear in Bankruptcy Court and defend against the client's discharge of the lawyer's claim.

Question
May the lawyer use confidential information obtained from the client or information obtained from public records in pursuing a claim for unpaid attorney fees against the client in the Bankruptcy Court?

Summary
The use of public record information obtained from the public domain in pursuing his claim for attorney fees would not violate the Rules of Professional Conduct. Further, a lawyer may also use confidential information obtained from the client in pursuing his claim for unpaid fees in the Bankruptcy Court.

Opinion
Rule 1.6, SCRPC, addressed the attorney's use of confidential information received from a client. Rule 1.6(a) provides that a lawyer "shall not reveal information relating to representation of a client unless the client consents after consultation, except for disclosures that are impliedly authorized in order to carry out the representation, and except as stated in paragraph (b)" (emphasis added).

Rule 1.6(b) provides, "A lawyer may reveal such information to the extent the lawyer reasonably believes necessary: (1) to prevent the client from committing a criminal act; or (2) to establish a claim or defense on behalf of the lawyer in a controversy between the lawyer and the client...or to respond to allegations in any proceeding concerning the lawyer's representation of the client."

Rule 1.6(b)(1) would allow the lawyer to reveal confidential information in order to prevent the client from committing a future criminal act. In the bankruptcy setting, this may be an under reporting or non-reporting of the client's true assets to the Bankruptcy Court by filing a false federal document. If such were the case, the lawyer has an obligation to seek to persuade the client from committing the criminal act. If the client refused, the lawyer would have the option to disclose the information to the Bankruptcy Court.

Rule 1.6(b)(2) provides that the lawyer could use such information in order to establish a claim for his fee. Again, a probable situation would be where the client intended to under report his true net worth to the Bankruptcy Court. It would appear that Rule 1.6(b)(2) would not prohibit the lawyer from utilizing confidential information that he obtained during the course of his representation to establish his claim for payment of the client's outstanding debt.

The Comment to this section states "a lawyer entitled to a fee is permitted by paragraph (b)(2) to prove the services rendered in an action to collect it. This aspect of the rule expresses the principle that the beneficiary of a fiduciary relationship may not exploit it to the detriment of the fiduciary. As stated above, the lawyer must make every effort practicable to avoid unnecessary disclosure of information related to a representation, to limit disclosure of those having the need to know it, and to obtain protective orders or make other arrangements minimizing the risk of disclosure."