Question: I represent a plaintiff in a case where we successfully mediated a very contentious employment discrimination case. At least I thought we had successfully mediated the case. Now, my client refuses to agree to some of the terms, mainly related to confidentiality and non-disparagement, which I thought were covered at the mediation. We have an upcoming hearing on the opposing party’s motion to enforce settlement. Can I handle the hearing? What rules should I consider?
Answer: You are prudent to think about this ahead of time because there are ethical issues to consider. First, you should consider whether there is a conflict of interest that prevents you from continuing to represent the client. Second, you should consider whether you are a necessary witness, and whether you can represent your client if there is an evidentiary hearing.
The first issue that a similarly situated lawyer should consider is whether there is a conflict of interest that prevents the lawyer from continuing the representation. One way a conflict of interest can arise is when a personal interest materially limits a lawyer’s ability to represent a client’s interests. N.H. R. Prof. Cond. 1.7(a)(2). Under N.H. R. Prof. Cond. 3.3, a lawyer has a duty not to knowingly make false statements of material facts to a tribunal, fail to disclose controlling legal authority, or offer false evidence. The duty includes an obligation to correct previously false statements and to disclose information that would otherwise be privileged under N.H. R. Prof. Cond. 1.6.
This duty of candor is a personal interest of the lawyer. If there is a conflict between the lawyer’s duty of candor under N.H. R. Prof. Cond. 3.3 and the client’s interests regarding the settlement agreement such that the lawyer’s candor obligation materially limits the lawyer’s ability to represent the client, the lawyer must withdraw from the representation. See N.H. R. Prof. Cond. 1.7, Comm. 8. The “personal interest” creating a conflict of interest does not need to be an independent ethical duty. If a lawyer’s personal financial interest in a case, perhaps because of a contingency fee, materially limits the lawyer’s ability to represent a client, a conflict of interest can arise. See O’Meara’s Case[1], 164, N.H. 170, 178 (2012).
If there is no conflict of interest, a similarly situated lawyer should also evaluate whether the lawyer is a necessary witness. If the lawyer’s testimony is necessary, the lawyer should look to N.H. R. Prof. Cond. 3.7, which states:
(a) A lawyer shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness unless:
(1) the testimony relates to an uncontested issue;
(2) the testimony relates to the nature and value of legal services rendered in the case; or
(3) disqualification of the lawyer would work unreasonable hardship on the client.
(b) A lawyer may act as advocate in a trial in which another lawyer in the lawyer’s firm is likely to be called as a witness unless precluded from doing so by Rule 1.7 or Rule 1.9.
There is a significant difference between New Hampshire’s formulation of N.H. R. Prof. Cond. 3.7 and the ABA’s Model Rule. New Hampshire’s formulation uses “unreasonable” in subparagraph (3), whereas the ABA’s Model Rule uses “substantial.” In McElroy v. Gaffney, 129 N.H. 382 (1987), the New Hampshire Supreme Court held that New Hampshire’s use of “unreasonable” “limit[ed] the scope of required disqualification and ease[d] the burden of the party charged with proving hardship.” 129 N.H. 382, 389 (1987). So even if a lawyer’s testimony is on contested issues, if disqualification would create an “unreasonable” hardship for the client, then the lawyer need not be disqualified. Id. at 389-390.
There is also a difference in the wording between N.H. R. Prof. Cond. 3.7 and the analogous court rule, N.H. Super. Ct. R. 36(d)(5)(ii). N.H. R. Prof. Cond. 3.7 states that a lawyer “shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness” while N.H. Super. Ct. R 36(d)(5)(ii) states that an “attorney who gives testimony at trial or hearing shall not act as advocate.” The Committee recognizes the difference in language between the Rules and is reluctant to read their differences to a nullity. Nevertheless, the Committee suggests that a prudent lawyer might consider how “trial” is used in N.H. R. Prof. Cond. 3.7 and, in light of the N.H. Super. Ct. R. 36(d)(5)(ii), conclude that it may very well include evidentiary hearings.
In conclusion, a lawyer faced with a motion to enforce a settlement agreement should evaluate first whether a conflict of interest has arisen that prevents the lawyer from continuing to represent the client. Second, if the lawyer is a necessary witness, the lawyer should assess whether disqualification applies under N.H. R. Prof. Cond. 3.7.
[1] O’Meara’s Case also deals with a lawyer that tried to wield his withdrawal as a sword against his client, so careful consideration of the impact of a lawyer’s withdrawal on the client’s interest is also prudent.