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Ethics update

By Jonathan Bishop

This section highlights recent developments in attorney professional responsibility, including new cases, advisory ethics opinions, pending legislation and proposed rule amendments.


    Shafer v. Berger, Kahn et. al., (2003) 107 Cal.App.4th 54 [131 Cal.Rptr.2d 777]

    In Shafer, the plaintiff argued on appeal that the trial court erred in dismissing the causes of action brought against the liability insurer's coverage counsel to recover for fraudulent misrepresentation of coverage and civil conspiracy. The court of appeal held that an attorney, who was retained by an insurance company to provide coverage advice in a lawsuit against its insured, may be held liable to the plaintiff in that lawsuit for making a fraudulent statement about coverage.

    Under the facts, counsel had a duty not to make fraudulent statements to the creditors, and counsel's alleged misrepresentation about lack of coverage for willful acts was a representation that was justifiably relied on by the creditors. The litigation privilege did not shield counsel from liability; and the pre-filing procedure for pleading a cause of action against an attorney for a civil conspiracy with a client did not apply.

    Parris v. Superior Court, (2003) 109 Cal.App.4th 285, 135 Cal.Rptr.2d 90.

    Plaintiffs brought a class action, alleging employer's violation of California's wage and hour laws regarding overtime compensation, and unfair competition. The trial court denied plaintiffs' motion to communicate with potential class members before class certification and to compel discovery of names and addresses of potential class members.

    The Court of Appeal ruled that the requirement of court approval for pre-certification communications with potential class action members was a prior restraint on speech, in violation of the California Constitution. Parris plainly rejects the requirement in prior cases that the trial court screen communications sent to potential class members.

    A court may impose restrictions on communications only when a party seeks an injunction, protective order or demonstrates "direct, immediate, and irreparable harm." Pre-certification communications are regulated by Rule 1-400 of the Rules of Professional Conduct, which prohibits false, misleading and deceptive messages.

Petition for Review Granted

    Fletcher v. Davis (2003) 106 Cal.App.4th 398, review granted May 14, 2003, S114715.

    In Fletcher, a discharged attorney brought an action against his former corporate client and other parties seeking to recover fees and costs pursuant to an oral charging lien. The trial court held that the client's agreement to a charging lien had to be in writing in order to be enforceable.

    In reversing the trial court, the court of appeal found that: (1) the oral charging lien was a valid oral agreement with a corporate client under Bus. & Prof. Code, §6148(d)(4); and (2) the charging lien was not subject to the writing requirement of rule 3-300 of the Rules of Profession-al Conduct, as it was not an adverse interest under case law interpreting the rule.

    On May 14, 2003, the California Supreme Court granted a petition for review to consider the following issues: (1) whether an attorney's agreement with a client authorizing a lien for payment of attorney's fees to be imposed against any recovery in litigation must be in writing; and (2) whether an attorney must obtain a judgment against the client to establish the amount of the lien before suing non-client third parties to enforce the lien.

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