This edition of Ethics Spotlight addresses the components of “informed written consent” when required under the Rules of Professional Conduct.
The California Rules of Professional Conduct require informed written consent from an affected client under a number of different circumstances involving conflicts of interest. For example, Rule 1.7 requires informed written consent from each client if a lawyer were to represent a client in a matter directly adverse to another current client or whenever there is a significant risk that the lawyer’s representation would be materially limited by the lawyer’s responsibilities or relationships to others or the lawyer’s own interests. Similarly, Rule 1.9 requires that a lawyer secure informed written consent from a former client in order to represent another person in the same or a substantially related matter adverse to the interests of the former client. Informed written consent is also required in other circumstances, including when engaging in a business transaction with a client (Rule 1.8.1), accepting compensation from someone other than the client (Rule 1.8.6), and representing a client materially adverse to a prospective client who has shared confidential information material to the substantially related matter (Rule 1.18).
“Informed consent” is defined in paragraph (e) of Rule 1.0.1, as “a person’s agreement to a proposed course of conduct after the lawyer has communicated and explained (i) the relevant circumstances and (ii) the material risks, including any actual and reasonably foreseeable adverse consequences of the proposed course of conduct.” As set forth in paragraph (e-1) of the Rule, “informed written consent” requires that the disclosures and the consent required by paragraph (e) be in writing. Paragraph (n), which defines “writing” broadly by reference to California Evidence Code Section 250, makes clear that informed written consent can be provided by email or other “electronic mail or facsimile.”
The American Bar Association’s Model Rules of Professional Conduct, as well as the Rules in a number of other states outside of California, use the term “informed consent, confirmed in writing.” Model Rule 1.0(b) states that such writing may be provided by the lawyer to the client, “confirming an oral informed consent.” The California Rule requires that the client’s consent be in writing, which suggests that in California a confirmatory writing provided by the lawyer might be insufficient to satisfy the requirements for informed written consent.
The sufficiency of the disclosures provided is determined based on the applicable facts and circumstances. Comment [4] to Rule 1.0.1 makes clear that “[t]he communication necessary to obtain … informed written consent will vary according to the rule involved and the circumstances giving rise to the need to obtain consent.” See also California State Bar Formal Opinion 1989-115 (“Whether a client’s waiver … is ‘informed’ is obviously a fact-specific inquiry.”).
In order to secure informed written consent, a lawyer must provide the client (whether current, former or prospective) with sufficient information such that the client’s decision to provide consent is informed. See Gilbert v. National Corp. for Housing Partnerships (1999) 71 Cal.App. 4th 1240 (“as a threshold matter one must know of, understand and acknowledge the presence of a conflict of interest before one can give informed consent to its existence”); People v. Mroczko (1983) 35 Cal.3d 86 (“waivers … must, of course, be knowing, intelligent acts done with sufficient awareness of the relevant circumstances and likely consequences”). “Informed consent requires that the client or former client have reasonably adequate information about the material risks of such representation to that client or former client.” Restatement (Third) of the Law Governing Lawyers § 122.
The client’s sophistication and ability to understand the disclosure are relevant factors in determining the sufficiency of the disclosures. See Comment [9] to Rule 1.7 (“The experience and sophistication of the client giving consent, as well as whether the client is independently represented in connection with giving consent, are also relevant in determining whether the client reasonably understands the risks involved in giving consent.”); Los Angeles County Bar Association Formal Opinion No. 471 (1992) (“In providing written disclosure, it is imperative that the clients understand the significance of facts presented and the adverse consequences. If either client is unable to do so, informed consent is not possible”).
It is clear, however, that not every possible consequence of a lawyer’s conflict of interest needs to be disclosed. Comment [4] to Rule 1.7 provides that “[t]he mere possibility of subsequent harm does not itself require disclosure and informed written consent. The critical questions are the likelihood that a difference in interests exists or will eventuate and, if it does, whether it will materially interfere with the lawyer’s independent professional judgment in considering alternatives or foreclose courses of action that reasonably should be pursued on behalf of each client.” See also Zador Corp. v. Kwan (1995) 31 Cal.App. 4th 1285 (“California law does not require that every possible consequence of a conflict be disclosed for a consent to be valid.”).
No matter how comprehensive an informed written consent might be, there are certain matters in which clients cannot consent to a conflict of interest. For example, lawyers are not permitted to represent opposing parties in litigation even with the informed written consent of both parties. See, e.g., Rule 1.7(d)(3) (“Representation is permitted under this rule only if the lawyer [secures informed written consent] and … the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal.”).
In addition, because the consent must be informed, there are situations where a lawyer may be precluded from securing the requisite consent due to the lawyer’s duty of confidentiality or the attorney-client privilege. See, e.g., California Business and Professions Code § 6068(e)(1) (“It is the duty of an attorney to … maintain inviolate the confidence, and at every peril to himself or herself to preserve the secrets, of his or her client”). If the required disclosure is precluded, representation of conflicting interests under Rule 1.7, for example, is also precluded because informed written consent is not possible. See Comment [7] to Rule 1.7; see also Comment [19] to ABA Model Rule 1.7 (“Under some circumstances it may be impossible to make the disclosure necessary to obtain consent. For example, when the lawyer represents different clients in related matters and one of the clients refuses to consent to the disclosure necessary to permit the other client to make an informed decision, the lawyer cannot properly ask the latter to consent.”).
Despite the requirement to provide a client with sufficient information such that the client’s decision to provide consent is informed, lawyers are permitted under California law to secure informed written consent to future conflicts of interest. See, e.g., Comment [9] to Rule 1.7 (“This rule does not preclude an informed consent to a future conflict in compliance with applicable case law.”); Visa U.S.A., Inc. v. First Data Corp. (N.D. Cal. 2003) 241 F.Supp.2d 1100 (“An advance waiver of potential future conflicts … is permitted under California law, even if the waiver does not specifically state the exact nature of the future conflict.”).
Comment [9] further provides that “[t]he effectiveness of an advance consent is generally determined by the extent to which the client reasonably understands the material risks that the consent entails. The more comprehensive the explanation of the types of future representations that might arise and the actual and reasonably foreseeable adverse consequences to the client of those representations, the greater the likelihood that the client will have the requisite understanding. The experience and sophistication of the client giving consent, as well as whether the client is independently represented in connection with giving consent, are also relevant in determining whether the client reasonably understands the risks involved in giving consent.” See also ABA Formal Op. 93–372 (“The closer the lawyer who seeks a prospective waiver can get to circumstances where not only the actual adverse client but also the actual potential future dispute are identified, the more likely it will be that a prospective waiver is consistent with the requirement of the Model Rules”).
Comment [10] to Rule 1.7 makes clear, however, that “[a] material change in circumstances relevant to application of this rule may trigger a requirement to make new disclosures and, where applicable, obtain new informed written consents.”
When informed written consent is required by the Rules of Professional Conduct, such consent must be informed by written disclosures made by the lawyer of the relevant circumstances and material risks, including any actual and reasonably foreseeable adverse consequences of the proposed course of conduct.
Neil J Wertlieb is an Inaugural Co-Chair and Founding Member of the California Lawyers Association Ethics Committee, and a former Chair of the Business Law Section and its Corporations and Business Litigation Committees. Mr. Wertlieb is the General Counsel of Milbank LLP. The views expressed herein are his own.