MARYLAND STATE BAR ASSOCIATION, INC.
COMMITTEE ON ETHICS
ETHICS DOCKET NO. 2000-27
Attorney’s Obligation Upon Becoming Aware of Potential Fraud by Treating Professional of Client
You have requested an opinion as to the proper course of action regarding a personal injury claim. You advise this Committee that you have a client who has treated with a chiropractor over a period of time. You received a bill indicating that this client had made visits to the chiropractor that were subsequently questioned by the client. After further inquiry, you received "sign-in sheets" from the chiropractor indicating your client was treated in his office. Upon questioning your client, you are informed that the chiropractor advised your client to falsify the sign-in sheets or "she would not be compensated for the case". She signed the sheets as instructed by the chiropractor. It is our further understanding that the falsification of the sign-in sheets occurred after the medical records and bills had been sent to the adverse insurance company requesting a settlement.
Your first inquiry is limited to whether you may proceed with settling this matter if you only submit the "legitimate" visits to the doctor as a gauge of your client's damages. Second, you request an opinion regarding your obligation to report the fraudulent acts of the chiropractor. Your third question asks whether you may continue to deal with this chiropractor in other cases currently in the office.
With respect to your first inquiry, nothing in the Rules of Professional Conduct prohibits you from continuing the representation of your client using the correct number of visits to the chiropractor. This, of course, would have to be done with the permission of the client. If the client persists in her pursuit of the fraudulent damages, you must terminate your representation pursuant to Rule 1.16(a)(l) and 1.16(b)(1). In fact, continued representation to the insurance company of the incorrect medical damages would be in clear violation of Rule 4.1 regarding truthfulness in statements to others, and Rule 8.4 (a), (b) and (c) regarding professional misconduct.
You advised in your letter that the "specials" have been sent to the insurance carrier, You have now been made aware of a misrepresentation made to a third party. Pursuant to Rule 4.1 of the Rules of Professional Conduct, you must rectify this situation. Further, your services have been used to perpetrate a fraud on the insurance company. Ordinarily Rule 1.6(b) is a permissive rule and does not impose an affirmative duty to make disclosures. In this case, Rule 4.1(b) may make Rule 1.6(b) mandatory. Rule 1.6 allows you to reveal a client's confidential disclosures under certain circumstances. Specifically, Rule 1 .6(b)(2) would be applicable to your situation. It states "a lawyer may reveal such information to the extent the lawyer reasonably believes is necessary to rectify the consequences of a client's criminal or fraudulent act in the furtherance of which the lawyer's services were used". This Rule does not permit the disclosure beyond what
would be necessary. Further, there may be several other ways in which to rectify the situation without disclosure of confidences. (See Comments to Rule 1.6) Disclosure of a client's confidences should be a choice of last resort. If after exhausting other avenues, disclosure is still necessary to correct the fraudulent act, then you must do so.
Your specific question as to whether you should continue to represent this client who has knowingly perpetrated a fraud on the insurance company even after rectifying the fraudulent submissions, is a professional consideration only you can decide.
Your second question regarding reporting the chiropractor's fraud is governed by Rule 1.6(a) which states "A lawyer shall not reveal information relating to representation of a client unless the client consents after consultation, except for disclosures that are impliedly authorized in order to carry out the representation, and except as stated in paragraph (b)". Thus, without your client's permission, you may not report the chiropractor's actions. As a member of a profession which attempts to prevent misconduct, fraud and injustice, you may request your client's permission to do so and are encouraged to do so by this Committee.
Your third question as to whether you may continue representation of present clients who are treating with this chiropractor is one not addressed by the Rules, After having confirmed that each client's treatment with this chiropractor was bona fide, then there is no prohibition to bringing these claims to an end. Again, the Committee might caution your use of said chiropractor in the future now that you are aware of his practices.
We hope the foregoing is responsive to your inquiry.