The State Bar seeks public comment on Proposed Formal Opinion Interim No. 19-0003 (Illegal Contract Provisions).
Deadline: December 22, 2021
Comments should be submitted using the online Public Comment Form. The online form allows you to input your comments directly and can also be used to upload your comment letter and/or other attachments.
The State Bar Standing Committee on Professional Responsibility and Conduct (COPRAC) is charged with the task of issuing advisory opinions on the ethical propriety of hypothetical attorney conduct. In accordance with applicable State Bar policy and procedure, the committee shall publish proposed formal opinions for public comment (See, State Bar Board of Trustee Resolutions July 1979 and December 2004. See also, Board of Trustee Resolution November 2016).
On May 10, 2018, the California Supreme Court issued an order approving 69 new Rules of Professional Conduct, which went into effect on November 1, 2018. Read this news release for information about the new rules. Proposed Formal Opinion Interim No. 19-0003 interprets the new Rules of Professional Conduct.
Proposed Formal Opinion Interim No. 19-0003 considers:
What are a lawyer's ethical duties when advising a client regarding the use of a contract provision in a transaction with a third party that is illegal under the law of the jurisdiction applicable to the transaction?
The opinion interprets rules 1.1, 1.2.1, 1.4, 1.13, 1.10, 1.16, 4.1, and 8.4 of the Rules of Professional Conduct of the State Bar of California; Business and Professions Code section 6068(d).
The opinion digest states: A California lawyer has a duty not to counsel or assist a client in conduct that the lawyer knows is criminal, fraudulent, or a violation of any law, rule, or ruling of a tribunal. That conduct includes promulgating or enforcing a contract provision in a transaction with a third party that is illegal under the law of the jurisdiction applicable to the transaction. If the lawyer knows that the provision is illegal as applied to the transaction, the lawyer should advise the client accordingly, may not recommend the use of the provision, and must counsel the client not to use it. If the client insists on the use of the illegal provision against the lawyer’s advice, the lawyer may not participate in promulgating or enforcing the illegal provision against a third party. The lawyer is permitted to withdraw from the representation if the client insists on using the illegal provision and, depending on the client’s continued conduct, may be required to do so. If the lawyer concludes that the client’s conduct is a violation of law reasonably imputable to the organization and likely to result in substantial injury to the organization, the lawyer for an organization must report the actions of the client constituent to a higher authority within the organization, unless the lawyer reasonably concludes that it is not in the best lawful interest of the organization to do so.
At its February 26, 2021, meeting, and in accordance with their procedures, COPRAC tentatively approved Proposed Formal Opinion Interim No. 19-0003 for a 90-day public comment distribution. Subsequently, at its October 8, 2021, meeting, COPRAC revised the opinion in response to public comment and approved Proposed Formal Opinion Interim No. 19-0003 for an additional 60-day public comment distribution.
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Committee on Professional Responsibility and Conduct
December 22, 2021