4.1 Truthfulness in Statements to Others

In the course of representing a client a lawyer shall not knowingly:

(a) make a false statement of material fact or law to a third person; or

(b) fail to disclose a material fact to a third person when disclosure is necessary to avoid assisting a criminal or fraudulent act by a client, unless disclosure is prohibited by Rule 1.6.


COMMENT

Misrepresentation

[1] A lawyer is required to be truthful when dealing with others on a client’s behalf, but generally has no affirmative duty to inform an opposing party of relevant facts. A misrepresentation can occur if the lawyer incorporates or affirms a statement of another person that the lawyer knows is false. Misrepresentations can also occur by partially true but misleading statements or omissions that are the equivalent of affirmative false statements. For dishonest conduct that does not amount to a false statement or for misrepresentations by a lawyer other than in the course of representing a client, see Rule 8.4.

Statements of Fact

[2] This Rule refers to statements of fact. Whether a particular statement should be regarded as one of fact can depend on the circumstances. Under generally accepted conventions in negotiation, certain types of statements ordinarily are not taken as statements of material fact. Estimates of price or value placed on the subject of a transaction and a party’s intentions as to an acceptable settlement of a claim are ordinarily in this category, and so is the existence of an undisclosed principal except where nondisclosure of the principal would constitute fraud. Lawyers should be mindful of their obligations under applicable law to avoid criminal and tortious misrepresentation.

Crime or Fraud by Client

[3] Under Rule 1.2(d), a lawyer is prohibited from counseling or assisting a client in conduct that the lawyer knows is criminal or fraudulent. Paragraph (b) states a specific application of the principle set forth in Rule 1.2(d) and addresses the situation where a client’s crime or fraud takes the form of a lie or misrepresentation. Ordinarily, a lawyer can avoid assisting a client’s crime or fraud by withdrawing from the representation. Sometimes it may be necessary for the lawyer to give notice of the fact of withdrawal and to disaffirm an opinion, document, affirmation or the like. In extreme cases, substantive law may require a lawyer to disclose information relating to the representation to avoid being deemed to have assisted the client’s crime or fraud. If the lawyer can avoid assisting a client’s crime or fraud only by disclosing this information, then under paragraph (b) the lawyer is required to do so, unless the disclosure is prohibited by Rule 1.6.


REPORTER’S NOTES:

Model Rule 4.1 (2002) substantively is in accord with M. Bar R. 3.7(b). Both rules prohibit a lawyer from making false statements of material fact or law to third parties. Whereas M. Bar R. 3.7(b) applies only to conduct during litigation, Model Rule 4.1 addresses the issue of truthfulness in statements to others in a broader context. Indeed, this rule regularly is cited as the rule governing the requirement of truthfulness by lawyers in the context of a negotiation. Both Model Rule 4.1 and M. Bar R. 3.7(b) make clear that a false statement must be made “knowingly” in order for the speaker to violate the rule.

Model Rule 4.1 prohibits both affirmative false statements as well as omissions when there is a duty to speak. False statements and omissions must, however, be material under Rule 4.1. The Task Force observed that this Rule was also in accord with both M. Bar R. 3.2(f)(3) (prohibiting a lawyer from engaging in conduct involving dishonesty, fraud, deceit or misrepresentation) and Model Rule 8.4(c) (stating that it is professional misconduct for a lawyer to engage in conduct involving dishonesty, fraud, deceit or misrepresentation). Model Rule 4.1(b) recognizes the duty to disclose material facts to avoid assisting a criminal or fraudulent act by a client may be limited by the confidentiality rule found in Model Rule 1.6. The Task Force previously recommended, however, the adoption of Model Rule 1.6, that permits lawyers to reveal confidences and secrets to the extent the lawyer reasonably believes necessary to prevent reasonably certain death or substantial bodily harm, or financial harm that results from a crime or fraud. The Task Force thought Rule 4.1 was a sensible guide to positive lawyer conduct, and accordingly recommended adoption of the Rule as written.