## **Learning Outcomes**

After reading this article, you will understand the ethical rules governing a lawyer’s role as evaluator. You will be able to identify when a lawyer may provide an evaluation for use by third parties, recognize when client consent is required, and apply the confidentiality rules that apply to evaluations. You will also be able to distinguish evaluations from other lawyer roles and answer MPRE-style questions on this topic.

## **MPRE Syllabus**

For the MPRE, you are required to understand the ethical duties of lawyers acting as evaluators for third parties. This includes knowing when evaluations are permitted, the need for client consent, and the confidentiality obligations involved. You should be prepared to:

- Identify when a lawyer may provide an evaluation of a matter affecting a client for use by someone other than the client.
- Distinguish between evaluations and investigations or advocacy.
- Determine when client informed consent is required before providing an evaluation.
- Apply the confidentiality rules to information obtained or disclosed during an evaluation.
- Recognize potential civil liability to third parties relying on a lawyer’s evaluation.

## **Test Your Knowledge**

_Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision._

1. A lawyer is asked by a client to provide a title opinion letter to a prospective buyer. The opinion will be shared with the buyer. What must the lawyer do before providing the evaluation?
   a) Nothing, as the client requested it.
   b) Obtain the client’s informed consent if the evaluation may adversely affect the client’s interests.
   c) Disclose all confidential information to the buyer.
   d) Refuse to provide the evaluation.

2. Which of the following is true regarding a lawyer’s duty of confidentiality when providing an evaluation for a third party?
   a) The duty does not apply if the evaluation is for a third party.
   b) The lawyer may disclose information only as authorized in connection with the evaluation.
   c) The lawyer must always disclose all information to the third party.
   d) The lawyer may never provide evaluations for third parties.

3. If a lawyer provides a negligent evaluation to a third party who relies on it and suffers loss, the lawyer:
   a) Is never liable to the third party.
   b) May be civilly liable if the third party’s reliance was invited.
   c) Is subject to criminal liability.
   d) Is subject to discipline only if the client is harmed.

## **Introduction**

Lawyers are often asked to provide evaluations of matters affecting a client for use by third parties, such as lenders, buyers, or regulators. The Model Rules set out specific duties for lawyers acting as evaluators, including when such evaluations are permitted, when client consent is required, and how confidentiality applies.

> **Key Term: Evaluation**
> A lawyer’s assessment of a legal matter affecting a client, prepared for use by someone other than the client, such as a third party.

### The Lawyer as Evaluator

A lawyer may provide an evaluation of a matter affecting a client for use by a third person if the lawyer reasonably believes making the evaluation is compatible with other aspects of the lawyer’s relationship with the client. Evaluations are common in real estate, business, and regulatory contexts.

> **Key Term: Third-Party Evaluation**
> An assessment or opinion prepared by a lawyer about a client’s legal position, intended for use by someone other than the client.

### When Is Client Consent Required?

If the lawyer knows or reasonably should know that the evaluation is likely to affect the client’s interests materially and adversely, the lawyer must obtain the client’s informed consent before providing the evaluation.

> **Key Term: Informed Consent**
> Agreement by a person to a proposed course of conduct after the lawyer has explained the material risks and reasonable alternatives.

### Confidentiality in Evaluations

Information relating to an evaluation is protected by the duty of confidentiality. The lawyer may not disclose information beyond what is authorized in connection with the evaluation unless the client gives informed consent or another exception to confidentiality applies.

> **Key Term: Confidentiality**
> The ethical obligation to not reveal information relating to the representation of a client unless the client consents or another exception applies.

### Distinguishing Evaluation from Investigation

An evaluation is distinct from an investigation. When a lawyer is retained by a third party to investigate a client, the lawyer does not represent the client and is not bound by the same duties. In contrast, when a lawyer provides an evaluation for a third party at the client’s request, the lawyer’s duties to the client remain primary.

### Civil Liability to Third Parties

A lawyer who provides an evaluation for a third party may be civilly liable if the third party was invited to rely on the evaluation and suffers loss due to the lawyer’s negligence.

> **Key Term: Civil Liability**
> Legal responsibility for damages or loss suffered by another, such as a third party relying on a lawyer’s evaluation.

## **Providing an Evaluation: Steps and Cautions**

1. Determine whether providing the evaluation is compatible with the lawyer’s duties to the client.
2. Assess whether the evaluation is likely to materially and adversely affect the client’s interests.
3. If so, obtain the client’s informed consent, preferably in writing.
4. Limit disclosure to what is authorized in connection with the evaluation.
5. Clearly describe any limitations or scope restrictions in the evaluation report.
6. Warn the third party if the evaluation is not intended for their reliance.

### **Worked Example 1.1**

A lawyer represents a company seeking a loan. The lender requests a legal opinion letter from the lawyer regarding the validity of the company’s contracts. The lawyer believes the contracts are valid but is aware of a minor unresolved issue that could affect enforceability.

**Question:** What must the lawyer do before providing the opinion letter to the lender?

> **Answer:** The lawyer must assess whether disclosure of the issue could materially and adversely affect the client. If so, the lawyer must obtain the client’s informed consent before including the issue in the evaluation. The lawyer must also limit disclosure to what is authorized and explain any limitations in the opinion letter.

### **Worked Example 1.2**

A lawyer is asked by a client to provide a property title opinion for a prospective buyer. The lawyer discovers a potential defect in the title that could reduce the property’s value.

**Question:** Can the lawyer provide the evaluation to the buyer without informing the client?

> **Answer:** No. If the evaluation may materially and adversely affect the client’s interests, the lawyer must obtain the client’s informed consent before providing the evaluation to the buyer. The lawyer must also comply with confidentiality obligations.

### **Exam Warning**

> Be careful: If you provide an evaluation for a third party without client consent when required, you may be subject to discipline. Always assess whether the evaluation could harm the client’s interests.

### **Revision Tip**

> Always distinguish between an evaluation (opinion for a third party) and advocacy or investigation. Only evaluations for third-party use are covered by these rules.

## **Key Point Checklist**

_This article has covered the following key knowledge points:_

- Lawyers may provide evaluations for third-party use if compatible with client duties.
- Client informed consent is required if the evaluation may materially and adversely affect the client.
- Confidentiality applies to all information in the evaluation unless disclosure is authorized or consented to.
- Evaluations are distinct from investigations or advocacy.
- Lawyers may be civilly liable to third parties who are invited to rely on a negligent evaluation.
- Clearly state any limitations or scope restrictions in the evaluation report.

## **Key Terms and Concepts**

- Evaluation
- Third-Party Evaluation
- Informed Consent
- Confidentiality
- Civil Liability

Advisor, evaluator, negotiator - Lawyer as evaluator