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The New York State Bar Association has voiced its opposition to changes to the Model Rules of Professional Conduct that would permit lawyers to breach client confidentiality to prevent crime or civil fraud. The changes were approved by the American Bar Association at its annual meeting in San Francisco Aug. 11. In a statement issued Aug. 12, State Bar President A. Thomas Levin said the ABA amendment struck at the “core values” of the legal profession. “The very foundation of a lawyers’ relationship with a client is based on trust,” Levin said. “This proposal would permit lawyers to violate that trust, and is unacceptable.” As amended by the ABA on Aug. 11, Model Rule 1.6 permits lawyers to disclose client confidences if the client is using the lawyer’s services to commit a crime or fraud that would cause financial harm to others. The rule previously permitted disclosure only to prevent “reasonably certain death or bodily harm.” The changes to the ABA rules were widely regarded as the legal profession’s response to recent corporate scandals in which many lawyers were accused of turning a blind eye to client misconduct. Provisions of the Sarbanes-Oxley Act authorizing the Securities and Exchange Commission to regulate lawyers practicing in the securities area have added to the pressure on the legal profession. The ABA model rules are not binding, however, and must be adopted by state court systems to have any legal effect. New York state disciplinary rules governing attorney conduct are adopted by the Administrative Board of the New York State Court System. The State Bar has generally been the body behind proposed amendments to the disciplinary rules, and has a strong advisory role in the rulemaking process. Levin, a partner in Meyer Suozzi English & Klein in Mineola, said Aug. 21 the State Bar’s opposition to the ABA rule changes stemmed largely from the amendment’s inclusion of civil fraud, along with criminal acts, as a trigger permitting lawyers to disclose client confidences. “Clients may come to us trying to fix a situation where financial losses have occurred,” he said. “They should not worry that we will point figures at them.” Under present New York Disciplinary Rule 4-101, a lawyer is permitted to disclose information necessary to prevent a crime. The rule was considerably stronger than the previous Model Rule 1.6, but now it represents a happy medium, said Levin. “We feel our rule was more moderate than theirs,” he said. “Theirs goes far beyond ours.” Levin said the State Bar’s 28-member executive board was unanimous in its opposition to the ABA amendment, but added that one of the ethics advisors to the board, Seth Rosner, a solo legal ethics practitioner in Greenfield Center, N.Y., had been a strong voice in favor of the rule changes. Rosner, who is chairman of the coordinating council for the ABA’s Center for Professional Responsibility, yesterday said he had proposed dropping the fraud language last year as a compromise and would have agreed to it again. He said he was comfortable with the existing DR4-101, but added the State Bar’s opposition was puzzling because the state rule in some ways went further than the ABA’s. For example, ABA Model Rule 1.6 applies only to lawyers whose services have been used by a client to commit a crime or fraud. The New York rule could be invoked by a lawyer less directly involved in a matter. “The ABA rule limits the lawyer’s discretion to disclose much more than the New York rule,” said Rosner. ‘MISGUIDED’ OPPOSITION But Stephen Gillers, a legal ethics professor at New York University School of Law and one of the strongest proponents of the ABA’s rule amendments, said the ABA rules, all in all, went further than New York’s disciplinary rules and that was a good thing. “The ABA got it right and the New York bar’s opposition is misguided,” he said. Gillers said the concerns about civil fraud voiced by those opposed to the ABA amendments were overstated. Most frauds, insofar as they involve mail and wire communications, he noted, are also crimes. Existing New York disciplinary rules, he said, also currently require lawyers to report frauds being perpetrated against the courts. Gillers predicted the New York bar’s opposition would have little impact on what he described as a national trend toward uniformity in professional conduct rules along the lines of the ABA’s amendments. “I think New York is being ignored,” he said. “The longer they wait, the more irrelevant they’re going to become.” But Levin said he believed most major legal markets, including Illinois, California and Florida, would ultimately join New York in not adopting the ABA Model Rules as amended, though he agreed with Gillers that states, including New York, had been moving in the direction of uniformity. “This is probably going to put the nail in the coffin of that effort,” he said.

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