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How is it determined whether an unrepresented third party is "adverse" or not? (This is "adverse" with respect to the counsel's client.)

For example, imagine a husband and wife are selling a home owned by the husband only and only the husband is represented by an attorney. The wife is unrepresented. During the transaction it is decided that the husband and wife should each receive half of the purchase price. The buyer gives each a check. However, let's imagine the check given to the wife is clearly defective. For example, suppose it was post-dated eight months in a state in which such a thing invalidates the check.

Does the husband's attorney owe a fiduciary duty to the wife to ensure she receives a legally valid document? Would the wife be considered an adverse or neutral party in this instance?

From what I can tell, a lawyer has an ethical obligation to ensure that "a legal process" is followed, so would this extend to intervening if a legally invalid financial instrument became part of a contract negotiation, even if that instrument did not affect the lawyer's client?

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  • Wouldn't it be up to the wife to sort it out with the buyer, in court if needs be?
    – user35069
    Jun 21, 2022 at 6:51
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    You might want to outline a different scenario. Being "decided that the husband and wife should each receive half of the purchase price" does not weaken the buyer's duty toward either or both of the spouses. Even if the wife is merely a beneficiary, under US law she would have standing to seek recovery if buyer does not honor his obligation to pay her. Jun 21, 2022 at 14:18

1 Answer 1

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In the U.S., the relevant considerations are governed by some state specific variant of the Model Rules of Professional Conduct.

If two people are adverse, there is a conflict of interest and they cannot be represented by the same lawyer, although some conflicts of interests can be waived. The relevant rules for this analysis are primarily 1.7, 1.8 and 1.9.

The model language of Rule 1.7 about which there is little variation states:

Conflict of Interest: Current Clients

(a) Except as provided in paragraph (b), a lawyer shall not represent a client if the representation involves a concurrent conflict of interest. A concurrent conflict of interest exists if:

(1) the representation of one client will be directly adverse to another client; or

(2) there is a significant risk that the representation of one or more clients will be materially limited by the lawyer's responsibilities to another client, a former client or a third person or by a personal interest of the lawyer.

(b) Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a lawyer may represent a client if:

(1) the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client;

(2) the representation is not prohibited by law;

(3) 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; and

(4) each affected client gives informed consent, confirmed in writing.

Rule 1.8 governs specific situations, mostly with the lawyer himself or herself which I omit:

Current Clients: Specific Rules . . .

(b) A lawyer shall not use information relating to representation of a client to the disadvantage of the client unless the client gives informed consent, except as permitted or required by these Rules. . . .

(f) A lawyer shall not accept compensation for representing a client from one other than the client unless:

(1) the client gives informed consent;

(2) there is no interference with the lawyer's independence of professional judgment or with the client-lawyer relationship; and

(3) information relating to representation of a client is protected as required by Rule 1.6.

(g) A lawyer who represents two or more clients shall not participate in making an aggregate settlement of the claims of or against the clients, or in a criminal case an aggregated agreement as to guilty or nolo contendere pleas, unless each client gives informed consent, in a writing signed by the client. The lawyer's disclosure shall include the existence and nature of all the claims or pleas involved and of the participation of each person in the settlement.

Rule 1.9 provides that:

Duties to Former Clients

(a) A lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person's interests are materially adverse to the interests of the former client unless the former client gives informed consent, confirmed in writing.

(b) A lawyer shall not knowingly represent a person in the same or a substantially related matter in which a firm with which the lawyer formerly was associated had previously represented a client

(1) whose interests are materially adverse to that person; and

(2) about whom the lawyer had acquired information protected by Rules 1.6 and 1.9(c) that is material to the matter; unless the former client gives informed consent, confirmed in writing.

(c) A lawyer who has formerly represented a client in a matter or whose present or former firm has formerly represented a client in a matter shall not thereafter:

(1) use information relating to the representation to the disadvantage of the former client except as these Rules would permit or require with respect to a client, or when the information has become generally known; or

(2) reveal information relating to the representation except as these Rules would permit or require with respect to a client.

With respect to an unrepresented person, outside of litigation, the main limitations are found in Rule 4.1 (truthfulness in statements to others which states: "In the course of representing a client a lawyer shall not knowingly: (a) make a false statement of material fact or law to a third person; or (b) fail to disclose a material fact to a third person when disclosure is necessary to avoid assisting a criminal or fraudulent act by a client, unless disclosure is prohibited by Rule 1.6.),

Rule 4.3 (dealing with unrepresented persons which states "In representing a client, a lawyer shall not communicate about the subject of the representation with a person the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the consent of the other lawyer or is authorized to do so by law or a court order."), and

Rule 4.4 (respect for the rights of third parties, which states "(a) In representing a client, a lawyer shall not use means that have no substantial purpose other than to embarrass, delay, or burden a third person, or use methods of obtaining evidence that violate the legal rights of such a person. (b) A lawyer who receives a document or electronically stored information relating to the representation of the lawyer's client and knows or reasonably should know that the document or electronically stored information was inadvertently sent shall promptly notify the sender.").

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