How About a New Ethics Rule on Fiduciary Representation?

I was at the NAELA National Aging and Law conference last week where I sat in in on the Kruse ethics lecture. (For those of you who didn’t know him, Clifton Kruse, a Colorado Springs elder law attorney and prior NAELA president, was the epitome of ethics and professionalism). This year’s speaker was Professor Patrick E. Longan, W. A. Bootle Chair in Ethics and Professionalism at Mercer Law.  Professor Longan spoke about the ethical issues that arise when a lawyer assists a fiduciary.

Professor, Longan started his lecture with a poignant story about his father, for whom in his later years Professor Longan served as fiduciary. Professor Longan used his personal experiences as an illustration of the deficiency in the Model Rules for dealing with fiduciary representation. After walking the audience members through three scenarios, in which the lawyer represented the fiduciary, the trust estate, or the beneficiary, Professor Longan proposed a new rule, which for the purpose of understanding in this post I will call Rule 1.19.  Rule 1.19 would make clear that the attorney in fiduciary representation represents the beneficiary acting through the fiduciary, much like a lawyer represents a corporation acting through its constituents. This means, for example, that in the case of wrongdoing by the fiduciary, the attorney would free to use confidential information to protect the client.  

Here is the full text of Professor Longan’s proposed new rule (reprinted with his permission), which is based upon a combination of existing  Model Rules 1.13 and 1.14: 

(a) A lawyer who assists a fiduciary in the discharge of the fiduciary’s duties to a beneficiary, through a trust, a power of attorney, a guardianship or similar arrangement, represents the beneficiary acting through the beneficiary’s duly authorized fiduciary.  Such a client is a beneficiary client. 

(b) If a lawyer for a beneficiary client knows that a fiduciary intends to engage, is engaging, or has engaged in fraud or breach of fiduciary duty, the lawyer shall proceed as is reasonably necessary in the best interest of the beneficiary client.  Unless the lawyer reasonably believes that it is not necessary in the best interest of the beneficiary client to do so, the lawyer shall take reasonably necessary protective action.  When taking protective action, the lawyer is authorized to reveal information relating to the representation to the extent necessary.

Professor Longan is in the process of writing an article that will be published in the NAELA journal next year.