ADDRESSING ETHICAL ISSUES IN TRANSACTIONAL DUE DILIGENCE AND NEGOTIATIONS
Ronald R. Levine II, Lucy Stark
I. Communications Ground Rules
a. Must balance duty to maintain client confidentiality with duty of honesty as well as weighing public interests (as defined in Rule 1.6(b)).
b. Applicable guidance – Rule 1.6
i. ABA Model Rule 1.6(a) “A lawyer shall not reveal information relating to the representation of a client unless the client gives informed consent, the disclosure is impliedly authorized in order to carry out the representation, or the disclosure is permitted by paragraph (b)” . . . .
ii. ABA Model Rule 1.6(b) permits a lawyer to reveal otherwise confidential client information to “to the extent the lawyer reasonably believes necessary:
1. to prevent reasonably certain death or substantial bodily harm;
2. to prevent the client from committing a crime or fraud that is reasonably certain to result in substantial injury to the financial interests or property of another and in furtherance of which the client has used or is using the lawyer's services;
3. to prevent, mitigate or rectify substantial injury to the financial interests or property of another that is reasonably certain to result or has resulted from the client's commission of a crime or fraud in furtherance of which the client has used the lawyer's services . . .”
iii. Comment 6 to ABA Model Rule 1.6:Paragraph (b)(1) recognizes the overriding value of life and physical integrity and permits disclosure reasonably necessary to prevent reasonably certain death or substantial bodily harm. Such harm is reasonably certain to occur if it will be suffered imminently or if there is a present and substantial threat that a person will suffer such harm at a later date if the lawyer fails to take action necessary to eliminate the threat.
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