ETHICS OPINION 16-02, continued
The lawyer’s independent professional judgment is governed by
Rule 5.4(c), N.D.R.Prof. Conduct, which provides limitations on
permitting a third party to interfere with the lawyer’s professional
judgment and obligation to his client, even if the third party is
paying the lawyer’s fee.
The North Dakota Rules of Professional Conduct are consistent
with the A.B.A. Model Rules of Professional Conduct 1.6(a),
1.7(a)(2), (b)(1)(4), 1.8(f ), and 5.4(c). Minnesota
reflects similar requirements under M.R.P.C. 1.6(a), 1.7(a)(2), (b)
(1)(4), 1.8(f ), and 5.4(c).
Although this matter has not come before the Court in North
Dakota, other states with similar codes of professional conduct
have held that a third party paying for attorney fees is not a conflict
of interest per se. The Pennsylvania Rules of Professional Conduct
recognize that lawyers are frequently asked to represent a client in
circumstances where a third party will pay the attorney fees. Cohen
v. Oasin, 844 F. Supp. 1065, 1068 (E.D. Pa. 1994). Courts in both
Louisiana and Massachusetts have denied motions to disqualify
attorneys under each state’s 1.8(f ) rule. In Devaney, the court stated
“it is not apparent that the mere fact of [a third party] paying counsel’s
fees should count as an actual conflict.” Devaney v. U.S., 47 F. Supp.
2d 130, 132 (D. Mass. 1999). Likewise, in Leleux, the argument
that the attorney’s representation was in violation of La. R. Prof.
Conduct 5.4(c), 1.8(f ) and 1.7(a)(2) merited “little discussion,” as
there was no evidence that the lawyer’s independent professional
judgment was affected by the third party paying his fees. LeleuxThubron v. Iberia Parish Gov’t, Civil No. 6:13-0852, 2015 WL
339617 at *9 (W.D. La. Jan. 23, 2015). In re Duke Investments,
Ltd. states: “Ultimately, it is the lawyer’s responsibility to determine
‘whether a conflict of interest exists,’ and it ‘is primarily an issue to
be resolved between lawyer and client.”’ In re Duke lnvs., Ltd., 454
B.R. 414, 426 (Bankr. S.D. Tex. 2011) (quoting Marin v. Gilberg,
No. V-07-62, 2008 WL 2770382, at *3 (S.D. Tex. July 11, 2008)).
38
THE GAVEL
In this case, Party A may pay the attorney’s fees on behalf
of Party B once the lawyer has determined there will be no
interference with his independent professional judgement
and the client consents. After undertaking representation,
the lawyer for Party B is then obligated to abide by all of the
rules set forth in the N.D.R.Prof. Conduct, paying particular
attention to those rules that provide for confidentiality
of Party B and the lawyer reasonably believes that his
representation of Party B will continue to remain adversely
unaffected by Party A.
CONCLUSION
Client consent is required after a discussion about the
payment arrangements. Written consent is strongly
suggested. The lawyer must determine that there will be no
interference of his independent professional judgment and
there will be no adverse effect on his representation of Party
B, despite his attorney fees being paid by Party A. Once both
of those requirements are met, the lawyer must maintain
confidentiality in his representation of the client and abide
by the N.D.R.Prof. Conduct.
This opinion was drafted by Ward K. Johnson II, and was
unanimously approved by the Ethics Committee on the 17th
day of February, 2016.
This opinion is provided under Rule 1.2(B), North Dakota
Rules for Lawyer Discipline, which states:
A lawyer who acts with good faith and reasonable reliance on
a written opinion or advisory letter of the ethics committee
of the association is not subject to sanction for violation of
the North Dakota Rules of Professional Conduct as to the
conduct that is the subject of the opinion or advisory letter.