SCR 20:2.3. Evaluation for use by 3rd persons

Evaluation for use by 3rd persons

(a) A lawyer may provide an evaluation of a matter affecting a

client for the use of someone other than the client if the lawyer reasonably

believes that making the evaluation is compatible with other aspects of

the lawyer's relationship with the client.

(b) When the lawyer knows or reasonably should know that the

evaluation is likely to affect the client's interests materially and adversely,

the lawyer shall not provide the evaluation unless the client gives

informed consent.

(c) Except as disclosure is authorized in connection with a report

of an evaluation, information relating to the evaluation is otherwise

protected by SCR 20:1.6.

ABA COMMENT

Definition

[1] An evaluation may be performed at the client's direction or when impliedly authorized in

order to carry out the representation. See Rule 1.2. Such an evaluation may be for the primary purpose

of establishing information for the benefit of third parties; for example, an opinion concerning the title

of property rendered at the behest of a vendor for the information of a prospective purchaser, or at the

behest of a borrower for the information of a prospective lender. In some situations, the evaluation

may be required by a government agency; for example, an opinion concerning the legality of the

securities registered for sale under the securities laws. In other instances, the evaluation may be

required by a third person, such as a purchaser of a business.

[2] A legal evaluation should be distinguished from an investigation of a person with whom

the lawyer does not have a client-lawyer relationship. For example, a lawyer retained by a purchaser

to analyze a vendor's title to property does not have a client-lawyer relationship with the vendor. So

also, an investigation into a person's affairs by a government lawyer, or by special counsel by a

government lawyer, or by special counsel employed by the government, is not an evaluation as that

term is used in this Rule

ient-lawyer relationship. For example, a lawyer retained by a purchaser

to analyze a vendor's title to property does not have a client-lawyer relationship with the vendor. So

also, an investigation into a person's affairs by a government lawyer, or by special counsel by a

government lawyer, or by special counsel employed by the government, is not an evaluation as that

term is used in this Rule. The question is whether the lawyer is retained by the person whose affairs

are being examined. When the lawyer is retained by that person, the general rules concerning loyalty

to client and preservation of confidences apply, which is not the case if the lawyer is retained by

someone else. For this reason, it is essential to identify the person by whom the lawyer is retained.

This should be made clear not only to the person under examination, but also to others to whom the

results are to be made available.

Duties Owed to Third Person and Client

[3] When the evaluation is intended for the information or use of a third person, a legal duty

to that person may or may not arise. That legal question is beyond the scope of this Rule. However,

since such an evaluation involves a departure from the normal client-lawyer relationship, careful

analysis of the situation is required. The lawyer must be satisfied as a matter of professional judgment

that making the evaluation is compatible with other functions undertaken in behalf of the client. For

example, if the lawyer is acting as advocate in defending the client against charges of fraud, it would

normally be incompatible with that responsibility for the lawyer to perform an evaluation for others

concerning the same or a related transaction. Assuming no such impediment is apparent, however, the

lawyer should advise the client of the implications of the evaluation, particularly the lawyer's

responsibilities to third persons and the duty to disseminate the findings

rges of fraud, it would

normally be incompatible with that responsibility for the lawyer to perform an evaluation for others

concerning the same or a related transaction. Assuming no such impediment is apparent, however, the

lawyer should advise the client of the implications of the evaluation, particularly the lawyer's

responsibilities to third persons and the duty to disseminate the findings.

Access to and Disclosure of Information

[4] The quality of an evaluation depends on the freedom and extent of the investigation upon

which it is based. Ordinarily a lawyer should have whatever latitude of investigation seems necessary

as a matter of professional judgment. Under some circumstances, however, the terms of the evaluation

may be limited. For example, certain issues or sources may be categorically excluded, or the scope of

search may be limited by time constraints or the noncooperation of persons having relevant

information. Any such limitations that are material to the evaluation should be described in the report.

If after a lawyer has commenced an evaluation, the client refuses to comply with the terms upon which

it was understood the evaluation was to have been made, the lawyer's obligations are determined by

law, having reference to the terms of the client's agreement and the surrounding circumstances. In no

circumstances is the lawyer permitted to knowingly make a false statement of material fact or law in

providing an evaluation under this Rule. See Rule 4.1.

Obtaining Client's Informed Consent

[5] Information relating to an evaluation is protected by Rule 1.6. In many situations,

providing an evaluation to a third party poses no significant risk to the client; thus, the lawyer may be

impliedly authorized to disclose information to carry out the representation. See Rule 1.6(a)

l fact or law in

providing an evaluation under this Rule. See Rule 4.1.

Obtaining Client's Informed Consent

[5] Information relating to an evaluation is protected by Rule 1.6. In many situations,

providing an evaluation to a third party poses no significant risk to the client; thus, the lawyer may be

impliedly authorized to disclose information to carry out the representation. See Rule 1.6(a). Where,

however, it is reasonably likely that providing the evaluation will affect the client's interests materially

and adversely, the lawyer must first obtain the client's consent after the client has been adequately

informed concerning the important possible effects on the client's interests. See Rules 1.6(a) and 1.0(e).

Financial Auditors' Requests for Information

[6] When a question concerning the legal situation of a client arises at the instance of the

client's financial auditor and the question is referred to the lawyer, the lawyer's response may be made

in accordance with procedures recognized in the legal profession. Such a procedure is set forth in the

American Bar Association Statement of Policy Regarding Lawyers' Responses to Auditors' Requests

for Information, adopted in 1975.