Rule 2.3. Evaluation for Use by Third Persons

(a) A lawyer may provide an evaluation of a matter affecting a client for the use of someone other than the client if the lawyer reasonably believes that making the evaluation is compatible with other aspects of the lawyer’s relationship with the client.

(b) When the lawyer knows or reasonably should know that the evaluation is likely to affect the client’s interests materially and adversely, the lawyer shall not provide the evaluation unless the client gives informed consent.

(c) Except as disclosure is authorized in connection with a report of an evaluation, information relating to the evaluation is otherwise protected by Rule 1.6.

Background

The Louisiana Supreme Court adopted this rule on January 21, 2004. It became effective on March 1, 2004, and has not been amended since. This rule is identical to ABA Model Rule of Professional Conduct 2.3 (2002).

In 2002, the ABA restructured the text of the corresponding Model Rule to clarify its application in two situations. First, when the evaluation poses no significant risk to the client, paragraph (a) requires only that the lawyer conclude that providing the evaluation is compatible with other aspects of the client-lawyer relationship. Second, when there is a significant risk of material and adverse effect on the client’s interests, paragraph (b) provides that the lawyer may not proceed without obtaining the client’s informed consent. See ABA Ethics 2000 Commission Revision Notes to Model Rule 2.3 (2002).

Comments to ABA Model Rule 2.3

Definition

[1] An evaluation may be performed at the client’s direction or when impliedly authorized in order to carry out the representation. See Rule 1.2. Such an evaluation may be for the primary purpose of establishing information for the benefit of third parties; for example, an opinion concerning the title of property rendered at the behest of a vendor for the information of a prospective purchaser, or at the behest of a borrower for the information of a prospective lender. In some situations, the evaluation may be required by a government agency; for example, an opinion concerning the legality of the securities registered for sale under the securities laws. In other instances, the evaluation may be required by a third person, such as a purchaser of a business.

[2] A legal evaluation should be distinguished from an investigation of a person with whom the lawyer does not have a client-lawyer relationship. For example, a lawyer retained by a purchaser to analyze a vendor’s title to property does not have a client-lawyer relationship with the vendor. So also, an investigation into a person’s affairs by a government lawyer, or by special counsel employed by the government, is not an evaluation as that term is used in this Rule. The question is whether the lawyer is retained by the person whose affairs are being examined. When the lawyer is retained by that person, the general rules concerning loyalty to client and preservation of confidences apply, which is not the case if the lawyer is retained by someone else. For this reason, it is essential to identify the person by whom the lawyer is retained. This should be made clear not only to the person under examination, but also to others to whom the results are to be made available.

Duties Owed to Third Person and Client

[3] When the evaluation is intended for the information or use of a third person, a legal duty to that person may or may not arise. That legal question is beyond the scope of this Rule. However, since such an evaluation involves a departure from the normal client-lawyer relationship, careful analysis of the situation is required. The lawyer must be satisfied as a matter of professional judgment that making the evaluation is compatible with other functions undertaken in behalf of the client. For example, if the lawyer is acting as advocate in defending the client against charges of fraud, it would normally be incompatible with that responsibility for the lawyer to perform an evaluation for others concerning the same or a related transaction. Assuming no such impediment is apparent, however, the lawyer should advise the client of the implications of the evaluation, particularly the lawyer’s responsibilities to third persons and the duty to disseminate the findings.

Access to and Disclosure of Information

[4] The quality of an evaluation depends on the freedom and extent of the investigation upon which it is based. Ordinarily a lawyer should have whatever latitude of investigation seems necessary as a matter of professional judgment. Under some circumstances, however, the terms of the evaluation may be limited. For example, certain issues or sources may be categorically excluded, or the scope of search may be limited by time constraints or the noncooperation of persons having relevant information. Any such limitations that are material to the evaluation should be described in the report. If after a lawyer has commenced an evaluation, the client refuses to comply with the terms upon which it was understood the evaluation was to have been made, the lawyer’s obligations are determined by law, having reference to the terms of the client’s agreement and the surrounding circumstances. In no circumstances is the lawyer permitted to knowingly make a false statement of material fact or law in providing an evaluation under this Rule. See Rule 4.1.

Obtaining Client’s Informed Consent

[5] Information relating to an evaluation is protected by Rule 1.6. In many situations, providing an evaluation to a third party poses no significant risk to the client; thus, the lawyer may be impliedly authorized to disclose information to carry out the representation. See Rule 1.6(a). Where, however, it is reasonably likely that providing the evaluation will affect the client’s interests materially and adversely, the lawyer must first obtain the client’s consent after the client has been adequately informed concerning the important possible effects on the client’s interests. See Rules 1.6(a) and 1.0(e).

Financial Auditors’ Requests for Information

[6] When a question concerning the legal situation of a client arises at the instance of the client’s financial auditor and the question is referred to the lawyer, the lawyer’s response may be made in accordance with procedures recognized in the legal profession. Such a procedure is set forth in the American Bar Association Statement of Policy Regarding Lawyers’ Responses to Auditors’ Requests for Information, adopted in 1975.

Annotations

Generally

This rule addresses a lawyer’s duties to a client in the context of preparing an evaluation for use by a nonclient. Other rules address the lawyer’s duties to third persons in connection with such an evaluation. See La. Rules of Professional Conduct Rule 4.1 (2004) (Truthfulness in Statements to Others).

Paragraph (a) permits a lawyer to prepare an evaluation of a matter that will be used by a nonclient if the lawyer reasonably believes that the evaluation will be compatible with the lawyer’s relationship with the client and the client gives informed consent.

Paragraph (b) permits the lawyer to make disclosures in connection with the evaluation. Otherwise, all other information relating to the representation is protected by Rule 1.6.

Ensuring “Compatibility” With Lawyer’s Obligations to the Client

Among other things, a lawyer must remain loyal to a client even when preparing an evaluation that will be relied upon by a third party. Therefore, when it appears reasonably likely that the lawyer’s evaluation or opinion may be adverse to the client’s interests, the lawyer should first obtain the client’s consent to releasing the evaluation. The consent of the client should be obtained only after the lawyer has fully informed the client concerning the “possible effects on the client’s interests.” See Restatement (Third) of the Law Governing Lawyers § 95(2) (2000).

Delictual Liability to Nonclients

The extent of a lawyer’s possible tort liability to third parties is beyond the scope of these annotations. However, lawyers preparing evaluations for use by nonclients should be cautioned that they may be liable for injuries caused to such persons by their failure to exercise reasonable competence and diligence in preparing such evaluations. See Restatement (Third) of the Law Governing Lawyers § 51(2) (2000); id. § 48; id. § 52. Lawyers may be liable not only for their negligence in preparing such evaluations, but also for making false statements of material fact or law, for making other statements prohibited by law, or for failing to make a disclosure required by law. See Restatement (Third) of the Law Governing Lawyers § 95(3) (2000); id. § 157; see also La. Rules of Professional Conduct Rule 4.1 (2004) (Truthfulness in Statements to Others).

Disciplinary Sanctions

Absent aggravating or mitigating circumstances, the following sanctions are generally appropriate in cases involving a violation of Rule 2.3: disbarment, when the lawyer knowingly engages in conduct that is a violation of a duty owed to the profession with the intent to obtain a benefit for the lawyer or another, and causes serious or potentially serious injury to a client, the public, or the legal system; suspension, when the lawyer knowingly engages in conduct that is a violation of a duty owed to the profession, and causes injury or potential injury to a client, the public, or the legal system; reprimand, when the lawyer negligently engages in conduct that is a violation of a duty owed to the profession, and causes injury or potential injury to a client, the public, or the legal system; and, admonition, when the lawyer engages in an isolated instance of negligence that is a violation of a duty owed to the profession, and causes little or no actual or potential injury to a client, the public, or the legal system. See ABA Stds. for Imposing Lawyer Sanctions std. 7.0 (1992) (Violations of Duties Owed as a Professional).

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Notes

This page was updated on August 1, 2013.