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Ethics Lawyer represents Client, who sustained serious injuries when she was hit by a truck driven by Driver. Lawyer and Client entered into a valid, written contingency fee agreement, whereby Lawyer would receive one-third of any recovery to Client related to the truck accident. Because Client was indigent, however, Lawyer orally agreed to advance Client’s litigation expenses and to lend her $1,000 monthly in living expenses that he would recoup from any eventual settlement. Lawyer did not tell Client that he had written a letter to Physician, Client’s doctor, assuring Physician full payment of her medical expenses from the accident out of the recovery in the case. Unfortunately, Driver had strong legal defenses to defeat the claim, and the case would not settle for the amount Lawyer initially forecast. Counsel for Driver finally offered $15,000 to settle the case without conceding liability. By this time, Lawyer had advanced $5,000 in litigation and living expenses, and Client had incurred $5,000 in medical expenses. Client was reluctant to accept the offer. Realizing, however, that this case could drag on indefinitely with little chance of substantial recovery, Lawyer took Client out for an expensive dinner, at which they shared two bottles of wine. Afterward Lawyer took Client to Lawyer’s apartment where they engaged in consensual sexual relations. Later that evening Lawyer persuaded Client to accept the settlement offer by agreeing to give her the net proceeds after his contingency fee and the amounts he had advanced were deducted and not to pay Physician anything. The next week, Lawyer distributed the net proceeds to Client as agreed. What ethical violations, if any, has Lawyer committed? Answer according to California and ABA authorities to the extent there is any difference among them.
Answer 5 This answer provided by Scott F. Pearce’s Master Essay Method, www.calbarexam.com. The Fee Agreement Client hired Lawyer to represent her in an action to recover damages for personal injuries Client suffered when she was hit by a truck driven by Driver. Although this contract was valid, it falls short of what is required under principles of professional responsibility. The agreement includes ethical violations that could subject Lawyer to discipline under either California or ABA standards. A. The Written Agreement The ABA authorities require that a written fee agreement, signed by the client, be used in contingent fee cases. Furthermore, the ABA requires that this written agreement contain the method of fee calculation, the percentage going to the lawyer, expenses to be deducted from the recovery, and whether the contingent fee is calculated before or after expenses are deducted. This rule is designed to help protect clients from being taken advantage of by their lawyers. Lawyer’s agreement with Client was in writing, but this document did not specifically explain the method of calculation, the expenses to be deducted (here, litigation costs and Physician’s fees), or whether the contingent fee is calculated before or after expenses are deducted. Accordingly, the written fee agreement does not satisfy the comparatively strict ABA standards California authorities do not require these terms to be in writing, but this technical distinction will not protect Lawyer from being disciplined by the California Bar. Lawyer should have told Client that he had promised Physician payment out of the eventual recovery. Lawyer was not candid with his Client about their deal from the very start of the representation, and this is enough by itself to subject Lawyer to discipline. B. The Oral Agreement Because Client was indigent, Lawyer orally agreed to advance litigation expenses and to lend her $1,000 monthly in living expenses that he would recoup from any eventual settlement. Both California and ABA authorities permit attorneys to advance litigation expenses, though the ABA requires this to be disclosed in a written fee agreement. Loaning Client money for living expenses is forbidden under both California and ABA standards, and Lawyer will be subject to discipline for this part of his deal with Client. C. Conclusion The written fee agreement omits material terms about Client’s liability for litigation expenses and the payment of Physician for Client’s medical expenses. This contract constitutes a serious breach of the duty of candor Lawyer owes Client. Lawyer’s promise to loan Client $1,000 a month for living expenses violates express provisions of both ABA and California rules which prohibit the practice. II. Lawyer’s Work on Client’s Case Much of Lawyer’s conduct during the litigation appears to have been competent. Although Driver had strong defenses to defeat Client’s claim, there is no reason to suspect that Lawyer filed the case in bad faith or acted unethically in his dealings with opposing counsel. Counsel for Driver refused to concede liability, but did offer $15,000 to settle the case. Lawyer had an ethical duty to communicate this offer to Client, which he did. It is apparent that Lawyer felt this was about as good an outcome as was possible under the circumstances, and that failing to accept the offer would result in a long and expensive delay with little chance of a substantial recovery. Perhaps this is a correct legal judgment, but Lawyer’s promise to loan Client $1,000 a month makes any delay far more expensive to Lawyer than it would have been otherwise. The fact that the prohibited oral agreement to advance living expenses to Client has resulted in an economic incentive for Lawyer to settle the case illustrates why this arrangement is forbidden. This conflict of interest constitutes a violation of Lawyer’s duties of competence and loyalty, and it will subject Lawyer to discipline. III. Lawyer’s Seduction of Client Client was reluctant to accept the $15,000 offer. Lawyer already had spent $5,000 on the litigation and on Client’s living expenses, and Client had incurred $5,000 in medical expenses. There is nothing inherently wrong with an attorney using his or her persuasive skills to entice a client to accept an unpalatable deal, but in this case Lawyer’s outrageous conduct would subject him to discipline under either ABA or California standards. The ABA authorities hold that it is a per se ethical violation for an attorney to have sex with a client, in the absence of a previously existing sexual relationship. The California rules do not contain a blanket prohibition, but they do indicate that a lawyer can be subject to discipline for sexual behavior that results in harm to a Client. It is hard to imagine a more clear-cut ethical violation. Here, Lawyer took every possible advantage of the trust and vulnerability of his indigent, seriously injured client. Lawyer took Client out for an expensive dinner, at which they shared two bottles of wine. Although the sexual relations that followed are described as consensual, Lawyer’s conduct appears to be little better than date rape. The circumstances strongly suggest that Lawyer seduced Client in order to get her to agree to a settlement of her case that she was unhappy with. This conduct violates every fiduciary duty, and would subject Lawyer to discipline under California or ABA standards. IV. Lawyer’s Breach of Contract With Physician At the start of the case, Lawyer wrote a letter to Physician, promising payment in full for Client’s treatment. As discussed above, Lawyer’s failure to disclose this to Client constitutes a breach of Lawyer’s duty of candor. After seducing Client, Lawyer persuaded Client to accept the offer by agreeing to give her $5,000, to take $5,000 in fees, and to recoup his $5,000 in litigation expenses and living expense loans to Client. Physician would be paid nothing. The next week, Lawyer distributed the net proceeds to Client as agreed. Thus, it is apparent that Lawyer intends simply to breach his agreement with Physician. This conduct is as foolish as it is unethical. Physician will be able to sue Lawyer for breach of a contract that can be proven by Lawyer’s letter to Physician. Even worse, Physician also will have a legal claim against Client, which means that Lawyer’s conduct could cause Client to be sued. This is another stark violation of both California and ABA standards of professional responsibility. V. Conclusion Lawyer’s written agreement with Client violated the duty of candor because of material omissions. Lawyer’s loans to client for living expenses violate express provisions of both California and ABA rules. Lawyer’s seduction of Client violates both the strict ABA standard and its more liberal California counterpart. Lawyer’s breach of his agreement with Physician appears to be in bad faith, thus violating Lawyer’s duty of honesty. It also violates Lawyer’s duty of competence, because breaching the contract with Physician leaves Client vulnerable to a lawsuit that she should not have to worry about.

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