Obsolete Date: 8/1/2006
(a) A lawyer may act as an intermediary between clients with potentially conflicting interests if:
(1) The lawyer consults with each client concerning the implications of the intermediation, including the advantages and risks involved, and the effect on theattorney-client privilege and obtains each client's consent to the intermediation;
(2) The lawyer reasonably believes that the matter can be resolved on terms compatible with the clients' best interests, that each client will be able to makeadequately informed decisions in the matter and that there is little risk of material prejudice to theinterests of any of the clients if the contemplated resolution is unsuccessful; and
(3) The lawyer reasonably believes that the intermediation can be undertaken impartially and without improper effect on other responsibilities the lawyer has toany of the clients.
(b) While acting as an intermediary, the lawyer shall consult with each client concerning the decisions to be made and the considerations relevant in making them, so that each client can make adequately informed decisions.
(c) A lawyer shall withdraw as an intermediary if any of the clients so requests, or if any of the conditions stated in paragraph (a) is no longer satisfied. After withdrawal, the lawyer shall not represent any of the clients in the matter that was the subject of the intermediation.
A lawyer acts as an intermediary under this Rule when the lawyer represents two or more parties with potentially conflicting interests. A key factor in defining the relationship is whether the parties share responsibility for the lawyer's fee, but the intermediation may be inferred from other circumstances. Because confusion can arise as to the lawyer's role where each party is not separately represented, it is important that the lawyer make clear the relationship.
The Rule does not apply to a lawyer acting as arbitrator or mediator between or among parties who are not clients of the lawyer, even where the lawyer has been appointed with the concurrence of the parties. In performing such a role the lawyer may be subject to applicable codes of ethics, such as the Code of Ethics for Arbitration in Commercial Disputes prepared by a joint Committee of the American Bar Association and the American Arbitration Association.
A lawyer acts as an intermediary in seeking to establish or adjust a relationship between clients on an amicable and mutually advantageous basis; for example, in helping to organize a business in which two or more clients are entrepreneurs, working out the financial reorganization of an enterprise in which two or more clients have an interest, arranging a property distribution in settlement of an estate or mediating a dispute between clients. The lawyer seeks to resolve potentially conflicting interests by developing the parties' mutual interests. The alternative can be that each party may have to obtain separate representation, with the possibility in some situations of incurring additional cost, complication or even litigation. Given these and other relevant factors, all the clients may prefer that the lawyer act as an intermediary.
In considering whether to act as an intermediary between clients, a lawyer should be mindful that if the intermediation fails the result can be additional cost, embarrassment and recrimination.In some situations the risk of failure is so great that intermediation is plainly impossible. For example, a lawyer cannot undertake intermediation with clients between whom contentious litigation is imminent or who contemplate contentious negotiations. More generally, if the relationship between the parties has already assumed definite antagonism, the possibility that the clients' interests can be adjusted by intermediation ordinarily is not very good.
The appropriateness of an intermediation can depend on its form. Forms of intermediation range from informal arbitration, where each client's case is presented by the respective client and the lawyer decides the outcome, to mediation, to intermediation where the clients' interests are substantially though not entirely compatible. One form may be appropriate in circumstances where another would not. Other relevant factors are whether the lawyer subsequently will represent both parties on a continuing basis and whether the situation involves creating a relationship between the parties or terminating one.
Confidentiality and Privilege
A particularly important factor in determining the appropriateness of intermediation is the effect on client-lawyer confidentiality and the attorney-client privilege. In an intermediation, the lawyer is still required both to keep each client adequately informed and to maintain confidentiality of information relating to the intermediation. See Rules 1.4 and 1.6. Complying with both requirements while acting as an intermediary requires a delicate balance. If the balance cannot be maintained, the intermediation is improper. With regard to the attorney-client privilege, the prevailing rule is that as between clients participating in an intermediation the privilege does not attach.Hence, it must be assumed that if litigation eventuates between the clients, the privilege will not protect any such communications, and the clients should be so advised.
Since the lawyer is required to be impartial between clients participating in an intermediation, intermediation is improper when that impartiality cannot be maintained. For example, a lawyer who has represented one of the clients for a long period and in a variety of matters might have difficulty being impartial between that client and one to whom the lawyer has only recently been introduced.
In acting as an intermediary between clients, the lawyer is required to consult with the clients on the implications of doing so, and proceed only upon consent based on such a consultation.The consultation should make clear that the lawyer's role is not that of partisanship normally expected in other circumstances.
Paragraph (b) is an application of the principle expressed in
- Rule 1.4.
Where the lawyer is an intermediary, the clients ordinarily must assume greater responsibility for decisions than when each client is independently represented.
Ordinarily court proceedings are adversarial and traditional concepts of a lawyer's role as advocate may cause doubt concerning the propriety of an intermediary appearing in court proceedings. However, a lawyer acting as an intermediary should be permitted to appear if the lawyer's role is disclosed to the tribunal and if the appearance is necessary or desirable to properly continue or conclude the intermediation. To prohibit the intermediary from appearing in such circumstances would eliminate a substantial benefit intended to be permitted by this Rule.
Intermediation does not diminish the rights of each client in the client-lawyer relationship.Each has the right to loyal and diligent representation, the right to discharge the lawyer as stated in Rule 1.16, and the protection of Rule 1.9 concerning obligations to a former client.
Reference: Minutes of the Professional Conduct Subcommittee of the Attorney Standards Committee on 08/23/85, 09/20/85, 12/13/85 and 01/10/86