July 15, 2004 Notices Pursuant to Rule 3-7.10, Seymour Friedman, formerly of New York, NY, and Los Angeles, CA, has petitioned the Florida Supreme Court for Bar reinstatement.Pursuant to an order of the Florida Supreme Court dated December 1, 1993, Friedman was suspended indefinitely in Florida based upon a five-year suspension of his license to practice law in New York for counseling a client to testify falsely, commingling his funds with client funds, and improper maintenance of escrow accounts. He has since been reinstated to practice in New York and California.Anyone having knowledge bearing upon Friedman’s fitness or qualifications to resume the practice of law should contact Edward Iturralde, bar counsel, The Florida Bar, 651 East Jefferson Street, Tallahassee 32399-0200, phone number (850) 561-5845.Proposed ethics advisory opinions Bar Examiner opening available Florida Board of Bar Examiners Vacancy: Lawyer applicants are being sought to fill one vacancy on the Florida Board of Bar Examiners.The Board of Governors will be selecting three nominees for one lawyer vacancy at its August 13 meeting. The nominations will then be forwarded to the Supreme Court to fill the remainder of a five-year term commencing immediately and expiring on October 31, 2008.Attorney members must have been a member of The Florida Bar for at least five years. They must be practicing lawyers with scholarly attainments and have an affirmative interest in legal education and requirements for admission to the Bar. Appointment or election to the bench at any level of the court system will disqualify any applicant. Law professors or trustees are ineligible.Board members of the Bar Examiners must be able to attend approximately 10 meetings a year in various Florida locations. Members volunteer 300 or more hours per year on board business depending on committee assignments. Actual travel expenses connected with the meetings and examinations are reimbursed.Persons interested in applying for this vacancy may download the application from the Bar’s Web site, www.flabar.org, or should contact The Florida Bar at 850/561-5600, ext. 5757, to obtain the proper application form. Applications may also be obtained by writing the Executive Director, The Florida Bar, 651 East Jefferson Street, Tallahassee, Florida 32399-2300. Completed applications must be received no later than the close of business Friday, July 16, 2004. Resumes will not be accepted in lieu of the required application. The Board of Governors will review all applications and may request telephone or personal interviews.Friedman petitions for reinstatement July 15, 2004 LAWS Regular News The Professional Ethics Committee has issued Proposed Advisory Opinions 04-1 and 04-2, reprinted in their entirety below. Pursuant to Rule 4(c) and (d) of The Florida Bar Procedures for Ruling on Questions of Ethics, comments from Florida Bar members are solicited on the proposed opinions. The committee will consider any comments received at a meeting tentatively scheduled to be held on Friday, September 10, 2004 in conjunction with The Florida Bar’s General Meeting in Tampa. Comments must contain the proposed advisory opinion number and clearly state the issues for the committee to consider. A written argument may be included explaining why the Florida Bar member believes the committee’s opinion is either correct or incorrect and may contain citations to relevant authorities. Comments should be submitted to Elizabeth Clark Tarbert, Ethics Counsel, The Florida Bar, 651 E. Jefferson Street, Tallahassee 32399-2300, and must be postmarked no later than August 16. PROFESSIONAL ETHICS OF THE FLORIDA BAR PROPOSED ADVISORY OPINION 04-1 (June 25, 2004) A member of The Florida Bar has inquired about the appropriate course of conduct in the representation of a client who has stated his intent to commit perjury at his upcoming criminal trial. The client has repeatedly expressed the client’s intent to commit perjury and, despite the lawyer’s repeated warnings, insists upon testifying falsely. The client has been warned that the lawyer must and will advise the court if a fraud is made upon the court. The lawyer has questioned the lawyer’s ethical obligations under this scenario. This inquiry addresses the circumstances when a lawyer definitely knows that the client intends to commit perjury. This is distinct from the many other situations where the lawyer may suspect but does not know that the client intends to commit perjury. This opinion only addresses this specific inquiry.Many ethics rules relate to this inquiry. Rule 4-1.2(d), Rules Regulating The Florida Bar, prohibits a lawyer from assisting a client in conduct the lawyer knows or reasonably should know is criminal or fraudulent. Rule 4-1.6, the confidentiality rule, which is very broad, applies “to all information relating to the representation, whatever its source.” Comment, Rule 4-1.6. However, there are exceptions to the confidentiality rule. Rule 4-1.6(b)(1) requires a lawyer to reveal information necessary to prevent a client from committing a crime. While interpretation of statutes is beyond the scope of an ethics opinion, it appears that it is a crime for a lawyer to permit or assist a client or other witness to testify falsely. See Florida Statutes §§ 837.02 and 777.011.The “Candor Towards the Tribunal” rule, Rule 4-3.3, provides in pertinent part: (a) False Evidence; Duty to Disclose. A lawyer shall not knowingly : (1) make a false statement of material fact or law to a tribunal; (2) fail to disclose a material fact to a tribunal when disclosure is necessary to avoid assisting a criminal or fraudulent act by the client; * * * (4) permit any witness, including a criminal defendant, to offer testimony or other evidence that the lawyer knows to be false. A lawyer may not offer testimony that the lawyer knows to be false in the form of a narrative unless so ordered by the tribunal. If a lawyer has offered material evidence and thereafter comes to know of its falsity, the lawyer shall take reasonable remedial measures. (b) Extent of Lawyer’s Duties. The duties stated in paragraph (a) continue beyond the conclusion of the proceeding and apply even if compliance requires disclosure of information otherwise protected by rule 4-1.6 [concerning lawyer-client confidentiality]. [Emphasis added.]A lawyer’s obligation to make disclosures under Rule 4-3.3 is triggered when the lawyer knows that a client or a witness for the client will make material false statements to a tribunal. Under the facts presented, the lawyer knows the client will make a misrepresentation to the court because the client has repeatedly expressed his intent to commit perjury. The comment to Rule 4-3.3 provides the following guidance: If a lawyer knows that the client intends to commit perjury, the lawyer’s first duty is to attempt to persuade the client to testify truthfully. If the client still insists on committing perjury, the lawyer must threaten to disclose the client’s intent to commit perjury to the judge. If the threat of disclosure does not successfully persuade the client to testify truthfully, the lawyer must disclose the fact that the client intends to lie to the tribunal and, per 4-1.6, information sufficient to prevent the commission of the crime of perjury.A lawyer is required to reveal information that is necessary to prevent a client from committing a crime, including the crime of perjury. Rule 4-1.6(b)(1), Rules Regulating The Florida Bar. The comment to Rule 4-1.6 provides: It is admittedly difficult for a lawyer to ‘know’ when the criminal intent will actually be carried out, for the client may have a change of mind. * * * Where practical the lawyer should seek to persuade the client to take suitable action. In any case, a disclosure adverse to the client’s interest should be no greater than the lawyer reasonably believes necessary to the purpose.If the lawyer knows that the client will testify falsely, withdrawal does not fulfill the lawyer’s ethical obligations, because withdrawal alone does not prevent the client from committing perjury. Rather, a lawyer must disclose to the court a client’s intention to commit perjury. This disclosure causes a conflict of interest between the lawyer’s ethical obligation to disclose and the client’s interest. Rule 4-1.7, Rules Regulating The Florida Bar. Due to the conflict, the lawyer must move to withdraw. Rule 4-1.16(a), Rules Regulating The Florida Bar. Notwithstanding good cause to withdraw, if the court requires the lawyer to continue the representation, the lawyer must comply with the court’s order. Rule 4-1.16(c), Rules Regulating The Florida Bar. A lawyer may offer the client’s testimony in the narrative only if the court orders the lawyer to do so. Rule 4-3.3(a)(4), Rules Regulating The Florida Bar.In the event that the client does not give advance notice to the lawyer prior to testifying falsely, Rule 4-3.3(a)(2) and the comment require the lawyer to take reasonable remedial measures to rectify the fraud. The comment to Rule 4-3.3 states:When false evidence is offered by the client, however, a conflict may arise between the lawyer’s duty to keep the client’s revelations confidential and the duty of candor to the court. Upon ascertaining that material evidence is false, the lawyer should seek to persuade the client that the evidence should not be offered or, if it has been offered, that its false character should immediately be disclosed. If the persuasion is ineffective, the lawyer must take reasonable remedial measures. * * * If perjured testimony or false evidence has been offered, the advocate’s proper course ordinarily is to remonstrate with the client confidentially. If that fails, the advocate should seek to withdraw if that will remedy the situation….[I]f withdrawal will not remedy the situation or is impossible and the advocate determines that disclosure is the only measure that will avert a fraud on the court, the advocate should make disclosure to the court. It is for the court then to determine what should be done-making a statement about the matter to the trier of fact, ordering a mistrial, or perhaps nothing.In conclusion, when a lawyer is representing a criminal client who has stated an intention to commit perjury, the lawyer is obligated, pursuant to Rules 4-1.2(d), 4-1.6(b)(1) and 4-3.3(a)(4), to disclose the client’s intent to the court. If the lawyer is not given advance notice of the client’s intent to lie, and the client offers false testimony, then the lawyer must convince the client to agree to disclosure and remediation of the false testimony; failing that, the lawyer must disclose to the court anyway. Absent client consent, the lawyer’s disclosure of the client’s false testimony or intent to offer false testimony will create a conflict between the lawyer and the client requiring the lawyer to move to withdraw from representation pursuant to Rule 4-1.16(a). If the court requires the lawyer to remain in the case, despite good cause for withdrawal, the lawyer must do so. Rule 4-1.16(c). It is then up to the court to determine what should be done with the information. This opinion is limited to the situation presented when a lawyer knows that his or her client is going to commit perjury. This opinion does not address the situation when a lawyer merely suspects but does not know that the client intends to commit perjury. PROFESSIONAL ETHICS OF THE FLORIDA BAR PROPOSED ADVISORY OPINION 04-2 (June 25, 2004) A member of The Florida Bar has requested an advisory opinion regarding a provision that the opposing party in securities litigation wants to include in a settlement agreement. The provision at issue states: Other than discussions between the parties, their immediate families, their respective attorneys, accountants, government officials, and self-regulatory bodies such as the NASD, all parties and their attorneys and agents agree, acknowledge and consent that they shall not in any method or manner discuss, publish, or disseminate any information concerning the settlement or the terms of this Release with any other party not specifically authorized by this Release to receive such information. Further, the Claimant and their attorneys and agents agree not to include or involve the Respondent’s claims, accounts, or investments in any other claim, dispute, action, negotiation, or proceeding against Respondent, its respective present or former parties and affiliates, and each of their officers, directors, servants, agents, employees, or registered representatives, including but not limited to…..The inquiring attorney states that he often represents several clients who are pursuing the same broker-dealer. The inquiring attorney is concerned that this provision impacts his ability to effectively represent other current or future clients. Thus, the inquiring attorney asks whether he may ethically enter into an agreement containing this provision.Rule 4-5.6(b) of the Rules of Professional Conduct prohibits clauses in settlement agreements that restrict the lawyer’s right to practice. Specifically, the rule states:A lawyer shall not participate in offering or making: (b) an agreement in which a restriction on the lawyer’s right to practice is part of the settlement of a controversy between private parties.The comment regarding this portion of the rule states “[s]ubdivision (b) prohibits a lawyer from agreeing not to represent other persons in connection with settling a claim on behalf of a client.”ABA Model Rule 5.6(b) is identical to Rule 4-5.6(b). In Formal Opinion 93-371, the ABA Ethics Committee stated the three public policy provisions behind the rule: The rationale of Model Rule 5.6 is clear. First, permitting such agreements restricts the access of the public to lawyers who, by virtue of their background and experience, might be the very best available talent to represent these individuals. Second, the use of such agreements may provide clients with rewards that bear less relationship to the merits of their claims than they do to the desire of the defendant to “buy off” plaintiff’s counsel. Third, the offering of such restrictive agreements places the plaintiff’s lawyer in a situation where there is conflict between the interests of present clients and those of potential future clients. While the Model Rules generally require that the client’s interests be put first, forcing a lawyer to give up future representations may be asking too much, particularly in light of the strong countervailing policy favoring the public’s unfettered choice of counsel.The Professional Ethics Committee has not previously addressed subsection (b) of Rule 4-5.6 or its predecessor in the prior Code of Professional Responsibility, DR 2-108(B) 1. The only Florida state court case where the rule is discussed in any substance is Lee v. Florida Department of Insurance, 586 So. 2d 1185 (Fla. 1st DCA 1991). However, the issue in Lee was whether a settlement agreement that was allegedly in violation of the rule was enforceable. As to rule 4-5.6(b) the court remarked To use rule 4-5.6 as the basis for invalidating a private contractual provision is manifestly beyond the stated scope of the Rules and their intended legal effect. Until paragraph 8 of the settlement agreement has been voided, canceled, or nullified by a court of competent jurisdiction, it must be treated as valid and binding on all parties legally affected by its terms. Whether attorney Bateman acted unethically in violation of the Rules by participating in the negotiation of a settlement agreement that included the provisions in paragraph 8 and should be disciplined therefor is not the issue in this proceeding. (Emphasis added; footnote deleted) 586 So. 2d at 1188-1189.Another case discussing Florida Rule 4-5.6 and also discussing the Lee case is an unreported case from the Southern District of Florida, Adams v. Bellsouth Telecommunications, Inc., 2001 WL 34032759 (S.D. Fla. Jan. 29, 2001).In connection with the settlement of the case, lawyers for the plaintiffs entered into an agreement with Bellsouth to provide “consulting” services to the telecommunications company. The Bellsouth attorneys argued to the District Court that their conduct did not violate Rule 4-5.6(b) because it only involved a “limited” restriction on the right of the plaintiff lawyers to practice which was allowed under the Lee decision. The federal court disagreed, observing: For several reasons, this Court therefore does not believe that Lee condones the practice restriction negotiated and agreed to in this case. First, there is no evidence that the practice restriction was designed in any way or constructed in any limited fashion to prevent the disclosure of confidential information. No party has revealed to this Court any serious argument along these lines. Rather, it is clear from the record and the testimony of the lawyers that BellSouth sought a practice restriction on Plaintiffs’ counsel to prevent Plaintiffs’ counsel from bringing future similar cases against BellSouth with the same kind of terrorist tactics used against BellSouth in this case. In short, the practice restriction was a payoff to Plaintiffs’ counsel to make them go away and never come back. As I explain infra, this type of arrangement is a violation of Rule 4-5.6 for well-grounded public policy reasons. Second, the practice restriction was not written to protect the clients of Plaintiffs’ counsel but rather to protect the opposing party, BellSouth. In fact, the evidence in this case makes clear that Plaintiffs never were informed of the existence, terms, or content of the practice restriction agreement by any of the lawyers. The Lee exception is designed to safeguard a client’s confidential disclosures to her lawyer and avoid a potential violation of conflict of interest rules through a lawyer’s subsequent representation of a different client in a related case. Here, the practice agreement was constructed for the benefit of the opposing party (without the knowledge of Plaintiffs’ clients) in a manner that placed Plaintiffs’ counsel in a direct conflict of interest with their clients a scenario inconsistent with the reasoning of Lee and the spirit of the bar rules. I therefore find the Lee dicta inapposite. Further, I also believe that had BellSouth’s lawyers engaged in the appropriate level of research into the issue, it would have been clear to them (if it already was not clear on its face) that the negotiated consulting arrangement was unethical. 2001 WL 34032759 at pp. 5-6 (emphasis in original; footnotes omitted).While Florida has no ethics opinions as to Rule 4-5.6(b), other jurisdictions do have opinions as to their version of the rule. These opinions include a number of opinions dealing with settlement agreements directly restricting lawyers from bringing claims against the other party again. See, ABA Formal Opinion 93-371, North Carolina Opinion RPC 179 (1994), California Formal Opinion 1988-104; Oregon Opinion 1991-47, and Michigan Bar, Opinion CI-1165. All of these opinions found such provisions to be a violation of their respective rules.Other states have dealt with provisions that seek to impose indirect restrictions on an attorney, rather than explicitly forbidding an attorney from representing others against a certain party. For example, in Texas Opinion 505 (1995), the Texas Committee determined that a settlement provision barring an attorney from soliciting people to bring suit against the opposing party and from sharing fees with other lawyers in the future in cases against the opposing party to be a violation of its version of the rule. Similarly, the New York City bar determined that its version of the rule was violated by a settlement provision barring an attorney from encouraging others to bring claims and from assisting or cooperating with other attorneys bring claims against the opposing party. Association of the Bar of the City of New York, Opinion 1999-3.The Colorado Bar in its Opinion 92 (1993) discussed a variety of indirect restrictions that could run afoul of its rule 5.6(b), including “barring a lawyer representing a settling claimant from subpoenaing certain records or fact witnesses in future actions against the defending party, preventing the settling claimants lawyer from using a certain expert witness in future cases, and imposing forum or venue limitations in future cases brought on behalf of non-settling claimants.” The committee formulated a test to use to help determine whether a given provision in a settlement provision improperly restricted a lawyer’s right to practice. As stated by the committee, “the test of the propriety of a settlement provision under Rule 5.6(b) is whether it would restrain a lawyer’s exercise of independent judgment on behalf of other clients to an extent greater than that of an independent attorney not subject to such a limitation.”The ABA issued an opinion determining that a ban on the use of information learned from a representation violates Model Rule 5.6(b) because it effectively prevents a lawyer from representing future clients because the lawyer’s inability to use the information would create a non-waivable conflict with the future clients under Model Rule 1.7(b), but a ban on disclosure of information learned from the representation of a client does not violate Model Rule 5.6. ABA Formal Opinion 00-417 (2000). Other states have address restrictions on the use or disclosure of information that are made as part of a settlement agreement. The Tennessee Ethics Committee determined in Opinion 97-F-141 that a provision restricting both a plaintiff and the plaintiff’s attorney from assisting others by using case information violated Tennessee Rule DR 1-208(B). Additionally, the New York State Bar Association, in its Opinion 730 (2000) determined that an attorney could not agree to confidentiality provisions in a settlement agreement where the terms of the agreement were broader than the attorney’s duty of confidentiality. The committee stated: . . . terms of a settlement agreement may violate DR 2-108(B) if their practical effect is to restrict the lawyer from undertaking future representations and if they involve conditions or restrictions on the lawyer’s future practice that the lawyer’s own client would not be entitled to impose.The New Mexico Bar issued an opinion, Advisory Opinion 1985-5 dealing with certain provisions in a settlement agreement. The first was a confidentiality provision as to the amount and terms of the settlement which the New Mexico Bar stated was permissible. The second provision required the plaintiff’s attorney to give her entire case file to the defense attorney to be sealed. The third provision required the plaintiff’s attorney to agree not to represent any more cases arising out of the same situation (a prison riot). The opinion concludes that the third provision violates New Mexico Rule 2-108(B) which prohibits a lawyer from entering into an agreement restricting his right to practice law in connection with the settlement of a controversy or lawsuit. As to the second provision, the opinion notes that under New Mexico law, the case file is the property of the client 2 H owever, the committee noted the file also contained the attorney’s work product which remained the attorney’s property and to which opposing counsel normally had no access. The committee determined that by making the provision include the entire file, it necessarily included the attorney work product, and as a result was a violation of Rule 2-1.08(b) because this may inhibit her ability to represent clients in the future and would allow defense counsel to “accomplish indirectly what they cannot accomplish by directly precluding the attorney from representing other plaintiffs with similar claims.”It should also be stated that the rule prohibiting settlement agreements restricting a lawyer’s right to practice applies to both the attorney making the offer and the attorney accepting it. See e.g., ABA Formal Opinion 93-371, Michigan Opinion CI-1165, New Mexico Opinion 1985-5, Colorado Formal Opinion 92, New York State Opinion 730, North Carolina Opinion RPC 179, and California Formal Opinion 1988-104. Additionally, any residual doubt about whether the prohibition applies to both sides of an agreement is resolved by Rule 4-8.4(a) which prohibits an attorney from violating the rules through the acts of another. Therefore, an attorney who “induces” another attorney to violate an ethics rule would be guilty of violating the ethics rules as well.While the above discussed authorities from other jurisdictions are not binding on the Professional Ethics Committee they provide guidance to the Committee in interpreting Florida Rule 4-5.6 and the provision presented by the inquiring attorney. If the Committee were faced with a provision that directly stated that one of the attorneys could not represent any other clients before the opposing party, we would find such a direct restriction to be an obvious violation of Rule 4-5.6. However, that is not the sort of provision the Committee is reviewing. If the provision is prohibited by Rule 4-5.6 it would be as an indirect restriction on the inquiring attorney’s ability to practice.In making such a determination, the provision must be examined carefully. The tests formulated by other jurisdictions are useful in this analysis. Does the provision, under the test formulated by the New York State Bar Association in its Opinion 730, seek to impose restrictions or conditions on the inquiring attorney’s future practice that the inquiring attorney’s own client would not be entitled to insist upon? Further, as stated by Colorado Opinion 92, does the provision restrain the inquiring attorney’s exercise of independent judgment on behalf of his clients to an extent greater than that of an attorney not subject to the provision? Additionally, as noted in New Mexico Opinion 1985-5, does the provision allow the opposing party to indirectly accomplish what it cannot accomplish directly, namely prevent the inquiring attorney from representing other clients against it in the future? Consideration should also be given, as the court did in the Lee case to whether the clause benefits the inquiring attorney’s client or whether it benefits the opposing party instead. Another consideration that should be made is whether the provision furthers or hinders the public policy reasons Rule 4-5.6(b) seeks to protect.While these tests are worded differently, they all boil down to one essential question: how does a particular settlement provision affect an attorney’s ability to represent another client in a matter involving the same or a related opposing party? If the provision has no effect on a lawyer’s ability to represent such a client, the provision will not run afoul of Rule 4-5.6(b). On the other hand, if a provision does affect a lawyer’s ability to represent another client and that effect is a negative affect, the provision is impermissible under Rule 4-5.6.Keeping this in mind, the Committee turns now to examine in detail the provision submitted by the inquiring attorney. The first clause of the settlement provision submitted by the inquiring attorney states: Other than discussions between the parties, their immediate families, their respective attorneys, accountants, government officials, and self-regulatory bodies such as the NASD, all parties and their attorneys and agents agree, acknowledge and consent that they shall not in any method or manner discuss, publish, or disseminate any information concerning the settlement or the terms of this Release with any other party not specifically authorized by this Release to receive such information.To the extent this clause is merely a confidentiality agreement as to the terms of the settlement it does not pose an ethical problem, provide there is no legal prohibition against confidentiality of a particular settlement. 3 T he clause at issue makes only the terms of the settlement and release itself confidential. Such confidentiality clauses have typically been determined not to violate ethics rules. See e.g, New Mexico Opinion 730 and Colorado Opinion 92. Also, the provision does not prohibit the inquiring attorney from using information about the case itself. Therefore, it differs from the provisions found to be problematic in ABA Formal Opinion 00-417, Tennessee Opinion 97-F-141 and New York State Bar Association Opinion 730.The only other possible problem with the clause is the confidentiality provision as to the terms of the release itself. The Florida Supreme Court has held that agreements seeking to prevent someone from filing a bar grievance are unenforceable and unethical. See, The Florida Bar v. Fitzgerald, 541 So.2d 602 (Fla. 1989) and The Florida Bar v. Frederick, 756 So.2d 79 (Fla. 2000). However, the clause does allow information to be given to “self-regulating bodies” and The Florida Bar is a self-regulating body for attorneys. Presumably then this sentence does not impose a restriction on any of the signatories ability to file a bar grievance against any of the attorneys involved in the case. The second clause of the provision is more problematic. It states: Further, the Claimant and their attorneys and agents agree not to include or involve the Respondent’s claims, accounts, or investments in any other claim, dispute, action, negotiation, or proceeding against Respondent, its respective present or former parties and affiliates, and each of their officers, directors, servants, agents, employees, or registered representatives, including but not limited to…..It does not appear that the provision is intended to be a general release of liability as to the defendants and affiliated parties as the provision refers to “ Respondent’s claims, accounts or investments” rather than those of the Claimant. If the provision were merely to release the respondent and the other people listed from future claims by the Claimant the provision would be worded differently.Thus, the Committee must examine how this provision will affect the inquiring attorney’s ability to represent other clients. The clause would prohibit the inquiring attorney from including or involving the “Respondent’s claims, accounts or investments in any other claim, dispute, action, negotiation or proceeding” against the Respondent and the named affiliates and people. The Respondent is a brokerage so while it is unclear what its “claims” may be, it is clear that “accounts or investments” will cover almost any type of matter that could be brought against the brokerage. This would be a broader restriction on the inquiring attorney that the client would be entitled to impose under Rule 4-1.9, the conflict of interest rule regarding former clients. If the inquiring attorney could not bring claims involving the brokerage’s “claims, accounts or investments” against the brokerage and its named affiliates, the attorney’s independent professional judgment on behalf of clients who may have claims against the brokerage would be limited as the attorney would be unable to bring such claims on the clients’ behalf. It is not clear how this provision would benefit the inquiring attorney’s current client. On the other hand, it certainly would benefit the opposing party to prevent the inquiring attorney from representing others against it and its affiliates. Further, the provision hinders, rather than advances the public policy reasons behind Rule 4-5.6. In sum, the second clause of the settlement provision submitted by the inquiring attorney runs afoul of Rule 4-5.6. Accordingly, the inquiring attorney may not ethically enter into a settlement containing this clause.In summary, Rule 4-5.6(b) prohibits Florida attorneys from proposing or agreeing to a restriction on an attorney’s right to practice in connection with a settlement of a matter between private parties. The prohibition applies both to direct and indirect restrictions. In determining whether a particular provision violates the rule, the effect of the provision on the attorney’s ability to represent other clients must be examined. This determination should include consideration of whether the provision imposes restrictions on the attorney broader than the attorney’s own client would be able to insist upon, whether the provision would limit the attorney’s independent professional judgment in the representation of other clients, whether the provision allows an opposing party to indirectly achieve a restriction on the lawyer’s right to practice, whether the provision benefits the client or the opposing party and whether the provision furthers or hinders the public policy reasons Rule 4-5.6 was founded upon. This list of considerations is not intended to be all-inclusive as different circumstances may call for different considerations. Nor is it intended that the considerations listed above form a rote checklist that must be followed before a provision can be found to be ethically impermissible. This is because, fundamentally, all of the considerations listed above are different ways of asking the same basic question: what is the effect of the provision on a lawyer’s ability to represent other clients? If the provision negatively affects the lawyer’s ability to represent other clients, the provision cannot be permissible under Rule 4-5.6. Taking all of this into consideration in examining the provision before the Committee, the Committee finds that the second clause of the provision is impermissible under Rule 4-5.6(b) because it negatively affects the inquiring attorney’s ability to represent other clients. 1 D R 2-108(B) stated “[i]n connection with the settlement of a controversy or suit, a lawyer shall not enter into an agreement that restricts his right to practice law.” 2 F lorida law is different. Under Florida law the case file is considered to be the attorney’s property. See, Ethics Opinion 88-11(rec). However, due to the resolution of the issue in the New Mexico opinion, this difference in the law does not mean the reasoning of the New Mexico opinion is not relevant. 3 See, e.g.; Fla. Stat. § 69.081 (“Sunshine in Litigation Act” which prohibits judgments, agreements and contracts that have the effect of concealing a public hazard). Whether a provision outside the ethics rules prohibits a confidentiality clause in any given case, is a question of law that is beyond the scope of an advisory ethics opinion. Draft Proposed Advisory Opinion The Professional Ethics Committee will consider adopting Proposed Advisory Opinion 00-2 (Reconsideration) based on its review of existing formal committee opinions at a meeting to be held on Friday, September 10, 2004, in conjunction with The Florida Bar’s General Meeting in Tampa. A draft appears in its entirety below. Pursuant to Procedures 4(c) and (d) of The Florida Bar Procedures for Ruling on Questions of Ethics, comments from Florida Bar members are solicited on the issues presented. Comments must contain the draft proposed advisory opinion number, must clearly state the issues for the committee to consider, and may include a proposed conclusion. Comments should be submitted to Elizabeth Clark Tarbert, Ethics Counsel, The Florida Bar, 651 E. Jefferson Street, Tallahassee 32399-2300, and must be postmarked no later than August 16, 2004. DRAFT PROPOSED OPINION 00-2 (Reconsideration) The Committee has reconsidered Opinion 00-2 which discourages lawyers from being involved in settlement agreements in which an insurance company places funds directly into an account in a client’s name instead of sending the lawyer a check which is then deposited into the lawyer’s trust account.Opinion 00-2 concludes that this type of arrangement, sometimes known as a “Safe Haven Account” or “FUNDaccount,” prevents a lawyer from fulfilling his or her ethical obligations to third parties. See Rule 5-1.1 and Rule 5-1.2, Comment, Rules Regulating The Florida Bar. Additionally, the Committee was concerned about “reducing available funds that otherwise would be used to assist in the administration of justice through participation in the Supreme Court approved IOTA program.”The Committee is concerned that Opinion 00-2 might be interpreted as mandating limitations on the client’s ability to direct payments of the client’s share of settlement funds into specific financial accounts or to designated third party recipients without having those funds placed first in a lawyer’s trust account. The client has wide discretion in directing the manner in which the monies owed to the client are distributed provided, however, that the client may not direct payment of funds in a manner intended to avoid the client’s legal obligation to pay the client’s lawyers or to pay debts owed to third parties. The Committee believes that the concerns expressed in Opinion 00-2 can be avoided in a settlement where the only funds going directly from the insurance company into a client’s financial account or to another recipient designated by the client are monies owed to the client and the insurance company issues a separate check to the attorney for the remaining balance, including attorney’s fees, any applicable costs, and amounts owed to third parties. The attorney would then deposit these funds into his or her attorney trust account and distribute the funds in accordance with the attorney’s ethical obligations.This agreement gives a lawyer control over that portion of settlement proceeds covering fees, costs, and amounts to which third parties may have valid legal claims. This permits the lawyer to fulfill his or her ethical duties under Rule 5-1.1 and Rule 5-1.2, Comment, Rules Regulating The Florida Bar. It also allows for the collection of interest on these funds, through placement in an IOTA account when required by Rule 5-1.1(e).In conclusion, a lawyer may participate in an arrangement where an insurance company pays only that portion of the settlement proceeds owed directly to the client into a client’s financial account or to another recipient designated by the client. As stated in Opinion 00-2, however, a lawyer should not participate in a settlement if the funds deposited into the client’s account include the attorney’s fees, costs and funds to which a third party may have a claim.Proposed board actions Pursuant to Standing Board Policy 1.60, the Board of Governors of The Florida Bar hereby publishes this notice of intent to consider or take final action at its August 13, 2004 meeting on the following items. These matters are additionally governed by Rule 1-12.1, Rules Regulating The Florida Bar, where applicable.Most amendments to the Rules Regulating The Florida Bar that are finally acted upon by the board must still be formally presented to the Supreme Court of Florida, with further notice and opportunity to be heard, before they are officially approved and become effective.To receive a full copy of the text of any of these proposed amendments call (850)561-5751 — reference any requested proposal by its title or item number and date of this publication. RULES REGULATING THE FLORIDA BAR Chapter 3 Rules of Discipline Subchapter 3-7 Procedures 1. Rule 3-7.2 Procedures Upon Criminal or Professional Misconduct; Discipline Upon Determination or Judgment of Guilt of Criminal MisconductSummary: Within subdivisions (b) and (c) extends conclusive proof provisions from felony cases to all criminal cases and requires a member of the bar who is arrested to give notice of the arrest to the executive director; also within subdivision (f), adds language stating that a petition to modify or terminate a suspension due to criminal conviction may only challenge the jurisdiction of the criminal court proceeding or the validity of the criminal proceedings due to a denial or lack of due process; amends subdivision titles accordingly. Chapter 4 Rules of Professional Conduct Subchapter 4-1 Client-Lawyer Relationship 2. Rule 4-1.8 Conflicts of Interest; Prohibited and Other Transactions; Limiting Liability for MalpracticeSummary: Within subdivision (h), prohibits lawyers from making arrangements that prospectively limit liability for malpractice, without first advising the affected person in writing of the opportunities of independent representation. Chapter 9 Legal Services Plans Subchapter 9-2 Requirements 3. Rule 9-2.2 Form and Content of Plan ApplicationSummary: Within subdivision (e), increases the prepaid legal services plan application fee from $50 to $125. 4. ABA MODEL RULESSummary: Chapters 4 and 5 of the Rules Regulating The Florida Bar revised throughout based on the final report of the Special Committee to Review the ABA Model Rules 2002. The proposed changes conform to the recommendations of the ABA Ethics 2000 Commission report. The full report including proposed changes in legislative format can be found on the Bar’s Web site (www.flabar.org) under Organization – Committees – Special Subchapter 4-1 4-1.1 4-1.2 4-1.3 4-1.4 4-1.5 4-1.6 4-1.7 4-1.8 4-1.9 4-1.10 4-1.11 4-1.12 4-1.13 4-1.14 4-1.15 4-1.16 4-1.17 4-1.18 Subchapter 4-2 4-2.1 4-2.2 4-2.3 4-2.4 Subchapter 4-3 4-3.1 4-3.2 4-3.3 4-3.4 4-3.5 4-3.6 4-3.7 4-3.8 4-3.9 Subchapter 4-4 4-4.1 4-4.2 4-4.3 4-4.4 4-5.1 4-5.2 4-5.3 4-5.4 4-5.5 4-5.6 4-5.7 Subchapter 4-6 4-6.1 4-6.2 4-6.3 4-6.4 4-6.5 Subchapter 4-7 4-7.1 4-7.2 4-7.3 4-7.4 4-7.5 4-7.6 4-7.7 4-7.8 4-7.9 4-7.10 4-7.11 Subchapter 4-8 4-8.1 4-8.2 4-8.3 4-8.4 4-8.5 4-8.6 Chapter 5 Subchapter 5-1 5-1.1 5-1.2 STANDING BOARD POLICIES Section 15.00 Lawyer Regulation Policies 5. Standing Board Policy 15.55 Deferral of Disciplinary Investigation During Civil or Criminal ProceedingsSummary: Clarifies that the chief branch discipline counsel, rather than staff counsel, may approve deferrals; clarifies that bar counsel can determine appropriate proceedings if it becomes apparent that civil authority will not address the misconduct; requires that notice of deferral be given to the designated reviewer. BOARD OF LEGAL SPECIALIZATION AND EDUCATION POLICIES 200 Series Florida Certification Plan 6. BLSE Policy 2.04 Certification Annual FeeSummary: Within subdivisions (c) and (f), adds new policy to assess $50 late fee for annual fee payments more than 45 days late and increases the annual fee and recertification file extension fees from $100, to $125. 7. BLSE Policy 2.11 Exam Preparation and AdministrationSummary: Within subdivision (e), replaces “approved” with “eligible” to describe certification candidates found to have satisfied the application criteria sufficient to sit for examination. 600 Series Florida Continuing Legal Education Education Requirements 8. BLSE Policy 6.03 Calculation and Allowance of Educational CreditSummary: Within subdivision (c), updates policy language to include reference to “mental illness awareness” component of CLER. 700 Series Basic Skills Course RequirementSummary: Re-write of BSCR policies to conform to current practice and to reflect corrections consistent with existing rules; removes duplicative rule 6-12 language; adds references to the specific rules, to eliminate the necessity for further policy revisions upon changes to any related rule; eliminates annual reporting of deferral entitlement; eliminates hearing procedures for noncompliance; adjusts delinquency reinstatement fee consistent with rule 1-3.7(b); adds reinstatement provisions consistent with rule 1-3.7(c) through (e); and, eliminates reference to the rules of procedure and burden of proof required in proceedings before BLSE. 9. Policy 7.01 Administration 10. Policy 7.02 Deferment 11. Policy 7.03 Exemption 12. Policy 7.05 Procedures on Noncompliance and Appeal 13. Policy 7.06 Reinstatement 14. Policy 7.08 Rules of Procedure and Burden of Proof BYLAWS 15. Labor & Employment Law SectionSummary: Within Article V (Terms of Officers and Executive Council Members, etc) adds requirements for those seeking the offices of chair of both the CLE Committee and CLE Subcommittee.