In personal injury settlements, particularly in products liability cases, defendants regularly seek varying levels of confidentiality as a necessary condition of the settlement. The  trend has been toward ever-increasing amounts of requested secrecy. Far from just seeking confidentiality of the settlement terms or amount, more and more defendants, especially corporate defendants, are seeking absolute secrecy, not just over the terms of the settlement  and not just from the injured plaintiff.

Sometimes the requested confidentiality provisions require participation by the plaintiff's attorney as well. Even where such provisions are not discussed at mediation or the time of settlement, proposed releases often attempt to hold the attorney to strict confidentiality in all aspects of the case, require the attorney to return all documents or require the destruction of evidence, such as the involved product.

There are professional and ethical rules that are implicated by these demands. Moreover, the request alone can place plaintiffs counsel in an ethical quandary: on one hand, their client's desire to complete the settlement, and on the other, their own requirement not to violate their obligations to the profession and future clients. This article explores the ethical limitations of what defense attorneys are allowed to offer and what plaintiffs attorneys are allowed to agree in terms of confidentiality and provisions in releases.

The Rules

The most common rule that is implicated in this context is Pennsylvania Rule of Professional Conduct 5.6 (b). It provides, in relevant part, that "A lawyer shall not participate in offering or making … an agreement in which a restriction on the lawyer's right to practice is part of the settlement of a client controversy." Notably, this rule is equally applicable to both sides of the controversy. Based on a plain-text reading and countrywide interpretation of the rule, not only is plaintiffs counsel barred from agreeing to such terms, defense attorneys are barred from offering them, see 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.

In addressing its own Model Rule 5.6, identical to Pennsylvania's, the ABA has explained that there are three policy considerations behind it: First, there is a risk that the public's access to the best attorney for a particular case will be curtailed. Those lawyers with the most experience handling specific types of cases would be effectively prevented from discussing their experience. Second, such a restraint could be motivated by an effort to "buy off" counsel rather than to resolve the dispute. Third, a restriction on an attorney's right to practice may place him in a position where the interests of the current client are in conflict with those of potential future clients.

Under this rule, there is one obvious express prohibition. As explained in Elliot v. Marino, No. 2:12-CV-1293, (W.D. Pa. Aug. 15, 2013), a defendant cannot, as a condition of settlement, require plaintiffs counsel to agree that they will not file suit against the defendant in future cases for other clients. Rule 5.6's prohibitions, however, are not merely limited to this kind of bright-line violation. State ethics committees recognize across the country have recognized that Rule 5.6 can still be violated, even where the terms in question are not express or whole-sale bars to future representation or practice. See, e.g., State Bar Association of North Dakota Ethics Committee, Opinion No. 97-05 (June 30, 1997).

Within that framework, many state ethics boards have been wary of overreaching settlement agreement provisions proposed under the auspices of confidentiality, that, in their view, potentially limit an attorney's future ability to practice. The ABA explained that a ban on the use of information effectively prevents a lawyer from representing future clients because the lawyer's inability to use the information would create a conflict with the future clients under Model Rule 1.7(b) that could not be waived. In other words, as the Board of Professional Responsibility of the Supreme Court of Tennessee explained, "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," see FEO 2016-F-161 (citing Colorado Ethics Opinion 92 (June 19, 1993)).

Requirements for Document Return

With this backdrop, many of the requests for attorney-implicated confidentiality run afoul of the provisions of Rule 5.6. One of the oft-proposed terms of such releases is a requirement that plaintiff's attorney return documents from the case. While at first blush, this may appear to be a generally ethical request, the issue is complicated as it often implicates documents that fall squarely within attorney work-product protections. The State Bar Association of North Dakota Ethics Committee explained that while document return does not necessarily violate Rule 5.6 "to the extent the provisions are interpreted to require [an attorney] turn over documents protected by the attorney work product doctrine, the provisions may be prohibited by Rule 5.6(b)," recognizing that the restriction of practice could arise either from the attorney losing access to or the other attorneys gaining access to those documents.

Case discovery and document production requires attorney effort to review, organize and process the data provided within those documents. After production of a raw discovery materials, the plaintiff has to refine the information to be workable and usable in a litigation context. In short, the documents as processed and stored is attorney-work product. The Tennessee Board of Professional Responsibility addressed this specific issue in its Formal Ethics Opinion 216-F-161. There, the board agreed that the plaintiff's review and processing of document production into a final form constituted attorney-work product and that required return of such work product restricted the attorney's ability to represent future clients.

Requirements for Confidentiality From Future Client's Cases

Confidentiality provisions attempt to extend confidentiality beyond the amount and terms of settlement, prohibiting the use of facts obtained for future clients. Such provisions, seeking to prevent plaintiffs counsel from revealing facts about prior cases and using the case as a prior similar incident in future litigation, as a party plaintiff's counsel has used has been routinely found to restrict a lawyer's ability to practice and has been rejected across the country. This is simply not allowed. See, e.g., ABA Formal Opinion 00-417, New York Bar Association Opinion #730 (2000); Tennessee Board of Ethics Formal Ethics Opinion 2018-F-166.

For example, the ABA explained that while provisions that limit attorney disclosure of information are not violations of the rule per se, a ban on future attorney use of the information certainly is. The Pennsylvania Bar Association has issued a similar formal opinion, finding that it is unethical to seek a settlement agreement term that prevents an attorney from using information obtained in future litigation. The rationale for this prohibition, as the D.C. Ethics committee explained, "is the intent to preserve the public's access to lawyers who, because of their background and experience, might be the best available talent to represent future litigants in similar cases, perhaps against the same opponent."

Requirements for Destruction of Evidence

Finally, particularly in products liability actions, some defendants are requesting the return or the complete destruction of the failed product. In keeping with the policy considerations of Rule 5.6 set forth above, this request has been prohibited where it limits or restricts the attorney's ability to practice. As the Tennessee Board of Ethics explained "by requiring destruction of the alleged defective product after settlement in a products liability case, defense counsel would accomplish indirectly what they cannot accomplish directly by precluding the attorney from representing other plaintiffs with similar claims

While there is not a wholesale ethical prohibition against attorney involvement in confidentiality provisions, defense attorneys are not permitted to offer, nor plaintiffs attorneys allowed to accept any confidentiality provisions or requirements that would inhibit an attorney's ability to demonstrate their experience in a particular type of litigation or zealously advocate for their future clients. In all settlement discussions, it's not enough that the involved clients are satisfied with their settlement provisions—all the involved attorneys must be sure they are advocating their client's interests within their own ethical and professional boundaries.

Elizabeth A. Bailey, an associate with Saltz Mongeluzzi Barrett & Bendesky, is a personal injury attorney who focuses on catastrophic personal injury cases resulting from construction and workplace accidents, aerial lift accidents, electrical accidents, and product defects and malfunctions in Pennsylvania and New Jersey. Contact her at [email protected].