Ethics Opinions

Opinion No. 75-4

Summary: If a lawyer finds that he has accepted employment in a litigation matter in violation of the provisions of DR 5-101(B) (in that he knew or should have known when he accepted the employment that he or a lawyer in his firm ought to be called as a witness in the case), he and his firm should withdraw from the case immediately. If after undertaking employment in a litigation matter, a lawyer learns that he or a lawyer in his firm may be called as a witness for a party other than his client, and that the testimony may be prejudicial to the interests of his client, the lawyer and his firm should withdraw from the case immediately; but if after undertaking employment in a litigation matter, a lawyer learns that he or a lawyer in his firm ought to be called as a witness for his client, the lawyer and his firm may continue to represent the client until the time of trial on the merits.

Facts: X Corporation borrowed a large amount of money from Y Bank in 1968. S was the major stockholder of X Corporation. Attorney A represented X Corporation at the time the loan was made, was clerk of the corporation, was involved in dealings between X Corporation and Y Bank, and was personal attorney for S. In 1972 S approached the law firm of B, C & D for assistance in obtaining a loan from another bank to pay off the loan from Y Bank, which was in default. Attorney B, a member of B, C & D, arranged for X Corporation to obtain the necessary financing from Z Bank. B and others gave their personal guarantees on the loan from Z Bank. The loan from Y Bank to X Corporation was repaid in 1973. B, C & D then commenced an action on behalf of X Corporation and S against Y Bank, alleging over-reaching and wrongful domination of X Corporation during the 1968-1973 period. A filed his appearance for Y Bank in the case, but later withdrew from the case, and upon his recommendation Attorney E was engaged to represent Y Bank in the case. A will be called as a witness by the plaintiffs. E says that he intends to depose B and may call B as a witness for the defendant, Y Bank. B inquires as to whether he must withdraw as counsel for the plaintiffs; whether his firm must withdraw as counsel for the plaintiffs; whether E must withdraw as counsel for Y Bank; and, if withdrawals are required, whether they must take place prior to the time when the case is ready for trial.

Discussion: We will assume that B has direct personal knowledge of information which is relevant to the matters in issue in the pending action, so that the announced intention of Attorney E to call B as a witness is not simply a tactical device employed in an attempt to remove B and his firm as trial counsel in the case (if that were so, B and his firm would not be required to withdraw; see our Opinion No. 74-2).
If our assumption is correct, it seems likely that B and his firm knew or should have known at the outset that B would be called as a witness in the case, in which event B and his firm should not have accepted employment in the litigation unless one of the exceptions provided in Disciplinary Rule DR 5-101(B) is applicable. Similarly, if after undertaking employment in the litigation it became apparent to B that he ought to be called as a witness on behalf of his clients, B and his firm should withdraw from participation in trial of the case unless one of the exceptions provided in DR 5-101(B) is applicable. Disciplinary Rule DR 5-102(A) so requires.
From the facts presented to us, we are unable to determine whether any of the exceptions provided in DR 5-101(B) is applicable. B and his firm will have to make that determination.
If, on the other hand, B did not know, and had no reason to anticipate, that he would be called as a witness by the defendants until after he and his firm undertook employment as trial counsel, Disciplinary Rule DR 5-102(B) would apply. It provides that:
If, after undertaking employment in contemplated or pending litigation, a lawyer learns or it is obvious that he or a lawyer in his firm may be called as a witness other than on behalf of his client, he may continue the representation until it is apparent that his testimony is or may be prejudicial to his client.
We are unable to determine from the information presented to us whether or not the potential testimony of B "is or may be prejudicial to" X Corporation or S. Indeed, B himself may not yet be able to make that determination. However, the presence or absence of potential prejudice to the clients may become apparent when B is deposed by E, and we believe that if B presently is unable to make that determination, the decision as to whether he and his firm must withdraw from service as trial counsel in the case may be deferred until after the deposition of B commences.
Disciplinary Rules DR 5-101 and DR 5-102 are unclear as to when a lawyer must effect his withdrawal from a case. We will attempt to provide some tentative guidelines for the bar, subject to future revision if we subsequently are enlightened by higher authority.
DR 5-101(B) provides that a lawyer shall not accept employment in a litigation matter if he knows or it is obvious that he ought to be called as a witness in the case (subject to certain exceptions). We believe that if a lawyer finds that he has accepted employment which was in violation of DR 5-101(B) when he accepted it, he should withdraw from the case forthwith, or at least as soon as new trial counsel can be engaged to protect the interests of the client.
DR 5-102(A) requires that if after undertaking employment in a litigation matter a lawyer learns or it is obvious that he ought to be called as a witness on behalf of his client, "he shall withdraw from the conduct of the trial and his firm, if any, shall not continue representation in the trial" (again subject to certain exceptions). We believe that it is the intent of DR 5-102(A) that the lawyer and his firm may continue to represent the client in the litigation until commencement of trial on the merits, since the rule makes specific reference to "conduct of the trial" and "representation in the trial," rather than making reference to the "litigation." The term "litigation" apparently is used in DR 5-101 and DR 5-102 in a broad sense to cover all phases of the case, rather than the trial as such; and the purpose of the rule appears to be to avoid certain situations which probably would arise only during the trial of the case (for example, having a lawyer argue in support of his own credibility or that of another lawyer in his firm).
DR 5-102(B) requires that if after undertaking employment in a litigation matter a lawyer learns or it is obvious that he ought to be called as a witness other than on behalf of his client, he may continue the representation of the client until it is apparent that his testimony is or may be prejudicial to his client. We believe that DR 5-102(B) should be construed so as to permit the representation to continue until the lawyer testifies, either at trial or upon deposition, if potential prejudice to the client does not sooner become apparent; but as soon as the lawyer is aware that he may be called as a witness by another party to the litigation and that his testimony may be prejudicial to the interests of his client, he and his firm must withdraw from the case regardless of the stage which the litigation then has reached. This may be either before or during the testimony of the lawyer, depending upon the facts of the particular case. The situation at which DR 5-102(B) apparently is directed is one in which the interests of the client may require that an attack be made upon the testimony of his own lawyer, either as to its accuracy or as to its truthfulness--a task which the same lawyer obviously should not undertake. As soon as the problem becomes obvious, new trial counsel should be employed.
Thus on the facts of the present case we conclude that if B accepted employment in violation of DR 5-101(B), he and his firm should withdraw from the case now; but that otherwise B and his firm may continue their representation of X Corporation and S until it becomes apparent that the testimony of B is or may be prejudicial to the clients, if such becomes apparent during the deposition of B, the deposition immediately should be suspended until new counsel for the clients can be obtained. In those circumstances, the withdrawal cannot be deferred to the time of trial.
While we cannot condone the action of Attorney A in filing an appearance for Y Bank in a case arising from a matter in which he previously represented the opposing parties, we do not believe that the fact that Attorney E was recommended by A as successor counsel in the case should disqualify E from participation in the case. (We assume that A and E are not affiliated in the practice of law in any way.)


Permission to publish granted by the Board of Delegates, 1975. As stated in the Rules of the Committee on Professional Ethics, this advice is that of a committee without official governmental status.
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