Confidentiality and credit cards

I have written here in the past about a number of ways that a lawyer’s obligation of confidentiality imposes limits on their ability to do certain things that others can do and even as to subject matter where it seems highly unfair. Most frequently, this issue arises when talking with lawyers about what they can and cannot do when a client or former client takes to social media to criticize the lawyer’s work.

The problem for lawyers is that the attorney ethics rules do not treat a public disclosure by a client or former client as a waiver of the ethical obligation of confidentiality in the same way that other law treats such disclosures as waiving attorney-client privilege. Thus, while RPC 1.6 offers some exceptions that allow lawyers to disclose otherwise confidential information, those exceptions are cabined.

Because online dustups on social media are not “proceedings” and because even though they can be characterized as a “controversy” responding to criticism online does not involve establishing a “claim or defense” in the way the rule contemplates, most jurisdictions and ethics authorities agree that a lawyer cannot rely upon RPC 1.6(b) to disclose details about the representation of a client or former client in order to try to refute, for example, an unfair negative review online.

Another area, not as often discussed here or most other places, where this “unfairness” of RPC 1.6 can rear its head is for lawyers who accept credit card payments from clients. This unfairness also only comes to pass if the lawyer feels like they are being hard done by a dissatisfied client but can have very harsh results if the lawyer hasn’t addressed the issue in their engagement contract with the client.

If a client or former client initiates a chargeback with the credit card company to contest the lawyer’s ability to retain the funds previously paid, RPC 1.6 will also tie the lawyer’s hands in trying to provide and produce information that the credit card company will ask for in that process and can result in the lawyer getting shafted on payment and having to then decide whether to sue the client for the fees.

This will be the case because a dispute with a credit card company is also not a “proceeding” as contemplated by RPC 1.6(b) and, although certainly a controversy between the lawyer and the client, most authorities will also conclude that responding to inquiries from a credit card company does not involve establishing “a claim or defense” as the rule envisions.

So, what is a lawyer to do? Well, the ease and convenience of allowing clients to pay for attorney fees using credit cards is obviously a huge net-positive for many lawyers. So simply refusing to accept such payments is not a realistic answer. Lawyers also cannot try to get their clients to contractually agree that they will not dispute payment or never initiate a chargeback procedure. Any such provision would be likely to be viewed as draconian and unenforceable. But what lawyers can do is include a provision in any engagement contract that makes clear that in exchange for the lawyer agreeing to accept payment for services by credit card the client provides consent, in advance, that in the event of any dispute about that payment or the initiation of any chargeback efforts the lawyer may disclose to the credit card company whatever information they reasonably believe is necessary to demonstrate the validity of the services provided.

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