Print Version
Previous PageFile uploaded: 11/2/2017

Rule 2.3. Evaluation for Use by Third Persons.

(a) A lawyer may provide an evaluation of a matter affectinga client for the use of someone other than the client if the lawyerreasonably believes that making the evaluation is compatible with other aspectsof the lawyer's relationship with the client.

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

(c) Except as disclosure is authorized in connection with areport of an evaluation, information relating to the evaluation is otherwisesubject to Rule 1.6.

Comment

Definition

[1] An evaluation may be performed at the client's directionor when impliedly authorized in order to carry out the representation. See Rule1.2. Such an evaluation may be for the primary purpose of establishinginformation for the benefit of third parties; for example, an opinionconcerning the title of property rendered at the behest of a vendor for theinformation of a prospective purchaser, or at the behest of a borrower for theinformation of a prospective lender. In some situations, the evaluation may berequired by a government agency; for example, an opinion concerning thelegality of the securities registered for sale under the securities laws. Inother instances, the evaluation may be required by a third person, such as apurchaser of a business.

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

Duties Owed to Third Person and Client

[3] When the evaluation is intended for the information oruse of a third person, a legal duty to that person may or may not arise. Thatlegal question is beyond the scope of this Rule. However, since such anevaluation involves a departure from the normal client-lawyer relationship,careful analysis of the situation is required. The lawyer must be satisfied asa matter of professional judgment that making the evaluation is compatible withother functions undertaken in behalf of the client. For example, if the lawyeris acting as advocate in defending the client against charges of fraud, itwould normally be incompatible with that responsibility for the lawyer toperform an evaluation for others concerning the same or a related transaction.Assuming no such impediment is apparent, however, the lawyer should advise the clientof the implications of the evaluation, particularly the lawyer'sresponsibilities 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 andextent of the investigation upon which it is based. Ordinarily a lawyer shouldhave whatever latitude of investigation seems necessary as a matter ofprofessional judgment. Under some circumstances, however, the terms of theevaluation may be limited. For example, certain issues or sources may becategorically excluded, or the scope of search may be limited by timeconstraints or the noncooperation of persons having relevant information. Anysuch limitations that are material to the evaluation should be described in thereport. If, after a lawyer has commenced an evaluation, the client refuses tocomply with the terms upon which it was understood the evaluation was to havebeen made, the lawyer's obligations are determined by law, having reference tothe terms of the client's agreement and the surrounding circumstances. In nocircumstances is the lawyer permitted to knowingly make a false statement ofmaterial fact or law or fail to disclose a material fact that must otherwise bedisclosed under the Rules. See Rule 4.1.

Obtaining Client?s Informed Consent

[5] Information relating to an evaluation is subject to Rule1.6. In many situations, providing an evaluation to a third party poses nosignificant risk to the client; thus, the lawyer may be impliedly authorized todisclose information to carry out the representation. See Rule 1.6(a). Where,however, it is reasonably likely that providing the evaluation will affect theclient?s interests materially and adversely, the lawyer must first obtain theclient?s consent after the client has been adequately informed concerning theimportant possible effects on the client?s interests. See Rules 1.6(a) and 1.0(f).

Financial Auditors' Requests for Information

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

 

Effective November 1, 2017