Connecticut Legal Ethics

1.8 Rule 1.8 Conflict of Interest: Prohibited Transactions

1.8:100 Comparative Analysis of Connecticut Rule

‰ Primary Connecticut References: CT Rule 1.8
‰ Background References: ABA Model Rule 1.8, Other Jurisdictions
‰ Commentary:
‰ Connecticut Commentary:

1.8:101 Model Rule Comparison

Conn. Rule 1.8(d), (e) and (j) are identical, or virtually identical, to Model Rule 1.8(d), (e) and (i) respectively. As a general dissimilarity, Conn. Rule 1.8 protects current as well as former clients while MR 1.8 simply says Ëclient.Ó Additionally, Conn. Rule 1.8(a) is similar to MR 1.8(a), except that Connecticut. adds Ëinvestment servicesÓ as a form of business transaction and the MR contains investments merely as an example in Comment 1. Also, MR 1.8(a)(3) adds additional requirements for consent not found in Conn. Rule 1.8(a)(3). The MR requires that the client give Ëinformed consentÓ in writing describing the Ëessential termsÓ of the transaction, while Connecticut merely requires that the client consent in writing. Both the Conn. Rule and the Model Rule require that the attorney tell the client whether the attorney is also providing legal services in this transaction. Connecticut adds Rule 1.8(a)(4) describing this requirement while the Model Rules simply includes a short description in Model Rule 1.8(a)(3).

While Model Rule 1.8(c) specifically states that a lawyer cannot solicit a substantial gift from a client, Conn. Rule 1.8(c) merely makes mention of this in a comment and only states that a lawyer may accept a gift if it meets Ëgeneral standards of fairnessÓ. Conn. Rule 1.8(g), dealing with settlements for multiple clients, does not require a signed writing from the client like the requirement found in Model Rule 1.8(g). Also, Conn. Rule 1.8(g), dealing with limiting the lawyerÁs liability, requires that it be permitted by law and that the client is independently represented in making the agreement while Model Rule 1.8(g)(1) only requires independent representation. Additionally, Model Rule 1.8(g)(2) adds Ëpotential claimsÓ while Conn. Rule 1.8(g) has the prohibition only on Ëclaims.Ó

Lastly, the Conn. Rules do not contain the prohibitions found in Model Rule 1.8(j) and (k) which deal with sexual relations with a client and the effect of a lawyerÁs violation of Rule 1.8 on a lawyerÁs firm, respectively.

1.8:102 Model Code Comparison

Conn. Rule 1.8(a) has no direct counterpart in the Model Code, although DR 5-104(A) addressed the same issues. Paragraph (c) has no counterpart in the Model Code. Paragraph (d) is substantially similar to DR 5-104(B) . Paragraph (e) makes substantial changes to DR 5-103(B). Paragraph (f)(1) is similar to DR 5-107(A)(1), while paragraphs (f)(2) and (3) add requirements not specified in the Model Code. Paragraph (g) is substantially the same as DR 5-106 . The first portion of Paragraph (h) is substantially similar to DR 5-102(A), while the second has no counterpart in the Model Code. Paragraph (j) is identical to DR 5-103(A)(1).

1.8:200 Lawyer's Personal Interest Affecting Relationship

‰ Primary Connecticut References: CT Rule 1.8(a)
‰ Background References: ABA Model Rule 1.8(a), Other Jurisdictions
‰ Commentary:
‰ Connecticut Commentary:

1.8:210 Sexual Relations with Clients

There appear to be no pertinent Connecticut court decisions or ethics opinions on this subject.

1.8:220 Business Transactions with Clients

An attorneyÁs investment of clientÁs funds in second mortgages with attorneyÁs mortgage company was a business transaction requiring consent of the client in writing, even though the attorney made no money on the transaction, as the attorney received the benefit of the use of clientÁs money to buy out mortgages of other clients and thus generate any good will that service might entail. Statewide Grievance Committee v. Botwick, 226 Conn. 299, 627 A.2d 901 (Conn. 1993).

Rule 1.8 envisions a written consent in conjunction with full disclosure of the transaction and its terms, as well as advice of independent counsel. Braunstein v. Statewide Grievance Committee, 2001 WL 219921 (Conn. Super. 2001).

In Statewide Grievance Committee v. Shea, 2001 WL 1284479 (Conn. Super. 2001), the court held that an attorney violates Rule 1.8 by accepting personal property from a client and then selling it after indicating in the retainer agreement that it was to be held in Ëescrow.Ó ËEscrowÓ was not clearly defined in the retainer agreement and the court concluded that a reasonable person can assume that it did not mean sale. Additionally, the court notes that Ëthe client should have been advised, in writing, of an opportunity to seek the advice of independent counsel, and the client has to consent in writing to an agreement to sell the items.Ó Id.

To meet the requirements of Rule 1.8, written consent from the client is required. The attorney must make a written disclosure to the client stating that they should consider obtaining independent counsel. All disclosures must be in writing. Statewide Grievance Committee v. Somers, 1999 WL 732978 (Conn. Super).

A lawyer should be permitted to obtain a lien on client property to secure the payment of his fee rather than to have to resort to other protective measure that may impact negatively on his representation of the client or on their relationship. Twachtman v. Hastings, 1997 WL 433878 (Conn. Super 1997). Such a lien is not a violation of Rule 1.8 where the attorneyÁs intention is merely to acquire security for the payment of his fees and the lien is a permissible security interest based upon recognized legal and ethical standards for the creation of such interests. Id.

A note and mortgage taken to secure a fee certainly constitute a security interest adverse to the client. Gersten v. Statewide Grievance Committee, 1997 WL 339123 (Conn. Super. 1997).

Informal Opinion 97-16 (1997) addresses the issue of whether an attorney can recommend to a client that they contract with an investment advisor for the management of their funds where the attorney is paid a referral fee by the investment advisor. The Committee found that an attorney could do this as long as the requirements of Rule 1.8(a)(1)-(4) are met. Additionally, the attorney must comply with Rule 1.8(b) by not using Ëinformation relating to the representation of the client to the disadvantage of the client unless the client consents after Çconsultation.ÁÓ Id.

Informal Opinion 97-3 (1997) addresses the issue of a partner in a law firm who owns a condominium and is also on the board of directors of the condominium association. The condominium association asked the partner and his firm to represent the association in the collection of common charges, penalties, and fines from other unit owners. The Committee concluded that ËRule 1.8 identifies a number of transactions which a lawyer may not conduct, none of which pertain to you, as a director, representing the association in collecting from a unit owner.Ó Id. The Committee did, however, state that this opinion does not address the conflict that might arise if a unit owner were the partnerÁs existing or former client nor does the opinion address whether Ëthe partnerÁs own interests outside his role as a director might conflict with those of the association.Ó Id.

Informal Opinion 01-12 (2001) addresses the issue of when a lawyer enters into a lease agreement with the client where the client will occupy space in the same suite of offices as the law firm. The Committee found that this is not a violation of Rule 1.8 provided that the law firm complies with the requirements of full disclosure, advice to obtain counsel and securing consent in writing.

1.8:300 Lawyer's Use of Client Information

‰ Primary Connecticut References: CT Rule 1.8(b)
‰ Background References: ABA Model Rule 1.8(b), Other Jurisdictions
‰ Commentary:
‰ Connecticut Commentary:

There appear to be no pertinent Connecticut court decisions or ethics opinions on this subject.

1.8:400 Client Gifts to Lawyer

‰ Primary Connecticut References: CT Rule 1.8(c)
‰ Background References: ABA Model Rule 1.8(c), Other Jurisdictions
‰ Commentary:
‰ Connecticut Commentary:

A lawyer who drafts a will naming himself as beneficiary violates Rule 1.8 even though another lawyer in the firm executed the will. Informal Opinion 97-11 (1997).

1.8:500 Literary or Media Rights Relating to Representation

‰ Primary Connecticut References: CT Rule 1.8(d)
‰ Background References: ABA Model Rule 1.8(d), Other Jurisdictions
‰ Commentary:
‰ Connecticut Commentary:

There appear to be no pertinent Connecticut court decisions or ethics opinions on this subject.

1.8:600 Financing Litigation

‰ Primary Connecticut References: CT Rule 1.8(e)
‰ Background References: ABA Model Rule 1.8(e), Other Jurisdictions
‰ Commentary:
‰ Connecticut Commentary:

1.8:610 Litigation Expenses

A lawyer, who represents a client in a personal injury case, may advance the cost of an MRI relating to injuries that are the subject of the lawsuit without violating Rule 1.8. The lawyer may also, subject to the clientÁs consent, deduct the cost of the MRI from the proceeds of the case. Informal Opinion 93-12 (1993).

A lawyer can pay for the travel and lodging of an indigent client, who lives out-of-state, to enable the client to attend a deposition. Informal Opinion 00-21 (2000)

1.8:620 Living and Medical Expenses

There appear to be no pertinent Connecticut court decisions or ethics opinions on this subject.

1.8:700 Payment of Lawyer's Fee by Third Person

‰ Primary Connecticut References: CT Rule 1.8(f)
‰ Background References: ABA Model Rule 1.8(f), Other Jurisdictions
‰ Commentary:
‰ Connecticut Commentary:

1.8:710 Compensation and Direction by Third Person

In Cheverie v. Ashcraft & Gerel, 65 Conn. App. 425, 783 A.2d 474 (Conn. App. 2001), a Washington-based law firm opened an office in Connecticut. The attorney hired to run the Connecticut branch was paid based on the cases originating from the Connecticut office. When the Connecticut office closed, many of the cases brought in by this attorney remained unresolved. To accommodate this attorney, the Washington firm agreed to retain the attorney as local counsel after the Hartford office closed and assured him that he would still be paid his percentage of gross fees for the cases that originate from the Connecticut office. The Connecticut Appellate Court held that this arrangement in no way implicated Rule 1.8(f) which deals with situations in which the attorney receives compensation from one other than his client.

A fee arrangement where a real estate agent pays the sellerÁs attorneyÁs fees is ethical if the attorney complies with the requirements of Rule 1.8(f). Informal Opinion 89-27 (1989)

1.8:720 Insured-Insurer Conflicts [see also 1.7:315]

Under Rule 1.8(f), an insurance defense attorney cannot disclose billing information to an outside auditing company hired by the insurance company, unless the insured consents after consultation. Informal Opinion 00-20 (2000).

1.8:730 Lawyer with Fiduciary Obligation to Third Persons [see 1.13:520]

There appear to be no pertinent Connecticut court decisions or ethics opinions on this subject.

1.8:800 Aggregate Settlements

‰ Primary Connecticut References: CT Rule 1.8(g)
‰ Background References: ABA Model Rule 1.8(g), Other Jurisdictions
‰ Commentary:
‰ Connecticut Commentary:

There appear to be no pertinent Connecticut court decisions or ethics opinions on this subject.

1.8:900 Agreements Involving Lawyer's Malpractice Liability

‰ Primary Connecticut References: CT Rule 1.8(h)
‰ Background References: ABA Model Rule 1.8(h), Other Jurisdictions
‰ Commentary:
‰ Connecticut Commentary:

1.8:910 Prospective Limitation of Malpractice Liability

Where every overture made by an attorney towards settlement included the requirement that she be given a personal release of claims for costs and penalties in addition to a release for her client, she violated Rule 1.8(f). Sullivan v. Town of Monroe, 2001 WL 951363 (Conn. Super. 2001).

99-20 (1999)

1.8:920 Settlement of Legal Malpractice Claim

A lawyer may violate Rule 1.8 if a fee dispute settlement with a client includes an agreement that the client will not file a grievance complaint against the lawyer. Informal Opinion 97-13 (1997).

1.8:1000 Opposing a Lawyer Relative

‰ Primary Connecticut References: CT Rule 1.8(i)
‰ Background References: ABA Model Rule 1.8(i), Other Jurisdictions
‰ Commentary:
‰ Connecticut Commentary:

Rule 1.8(i) refers only to the representation of existing clients and not the representation of former clients. Matthews Group, Inc. v. Essex Savings Bank, 1993 WL 78657 (Conn. Super. 1993).

1.8:1100 Lawyer's Proprietary Interest in Subject Matter of Representation

‰ Primary Connecticut References: CT Rule 1.8(j)
‰ Background References: ABA Model Rule 1.8(j), Other Jurisdictions
‰ Commentary:
‰ Connecticut Commentary:

There appear to be no pertinent Connecticut court decisions or ethics opinions on this subject.

1.8:1110 Acquiring an Interest in Subject Matter of Representation

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1.8:1120 Contingent Fees [see also 1.5:600]

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1.8:1130 Lawyer Liens

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1.8:1140 Retention of Files to Collect Fees

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