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118 N.J.L.J. 560
October 23, 1986
ADVISORY COMMITTEE ON PROFESSIONAL ETHICS
Appointed by the Supreme Court of New Jersey
Attorney-Client Confidentiality -
Disclosure of Embezzlement
by Estate Administrator
This inquiry although posed with more complexities may be
stated as follows:
The lawyer for the administrator of a decedent's estate is
told by the administrator that he has "borrowed" estate assets to
meet personal expenses. What is the lawyer's ethical obligation to:
(a) his client
(b) other estate beneficiaries and/or their legal counsel
(c) the Court
(d) a bonding company?
Until superseded by the present Rules of Professional Conduct DR
A lawyer who received information clearly
establishing that his client has, in the course of the
representation, perpetrated a fraud upon a person or
tribunal shall promptly call upon his client to rectify
the same, and if his client refuses or is unable to do
so, he shall reveal the fraud to the affected person or
The present ethical rule, RPC 1.6, states:
(a) A lawyer shall not reveal information relating
to representation of a client unless the client consents
after consultation, except for disclosures that are
impliedly authorized in order to carry out the
representation, and except as stated in paragraphs (b)
(c) A lawyer may reveal such information to the
extent the lawyer reasonably believes necessary:
(1) to rectify the consequences of a
client's criminal, illegal or fraudulent act
in the furtherance of which the lawyer's
services had been used; (emphasis supplied).
The lawyer's first recourse should be to the client, seeking
his consent to the disclosure of the pertinent information in order
that the defalcation and any resulting injustice might be corrected
as promptly and as effectively as possible.
Absent the client's consent, is it the obligation of the
lawyer to rectify the consequences of the client's act? While the
prior disciplinary rule directed disclosure, the present rule
merely allows it. By its language, it permits but does not demand
In prior and more recent opinions we have recognized that in
certain situations a lawyer is either authorized or obligated to
reveal otherwise confidential information to the proper
This is consonant with public policy and concern for the role
of the legal profession in contemporary society.
The recent Supreme Court decision in Fellerman v. Bradley, 99
N.J. 493 (1985) is illustrative of a perceptible trend concerning
In Fellerman, the Court held that a lawyer's refusal to
disclose a client's address, thereby directly interfering with the
judicial process, constituted a "fraud on the Court." Id. at 504.
Fellerman explicitly expressed the Court's concern with the "proper
and effective administration of justice." Id. at 504.
In our recent Opinion 586, 117 N.J.L.J. 533 (1986) relating to
a judgment based on deception we pointed out the "inherent
obligation which a lawyer has to prevent a continuance of a wrong"
and that "failure to do so obviously would result in what may be
termed a continuing fraud on the Court, or a continuing conspiracy
by which fraud remains uncovered." The lawyer should not
participate in a "silent conspiracy".
As to the present inquiry this Committee feels that the lawyer
should advise the Court and other counsel, if any, as to the
particular situation presented for dealing with it in the most
appropriate manner considering all the facts and circumstances.
The grievousness of a given case could range from embezzlement
of an amount relatively small but involving virtually all the
assets of the estate (as in the circumstances prompting this
inquiry) to embezzlement on a grand scale with a clear and imminent
potential for even more egregious harm to the parties involved and
possibly o a bonding company.
Although the language of RPC 1.6(c) is permissive and not
mandatory the rights of the parties involved and fundamental
concepts of justice and fairness demand and amply justify the
procedure outlined in this opinion.
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