Q: Dear Ethics Lawyer, Our client was sued for breach of contract, and discovery requests were served with the complaint. I immediately reviewed relevant documents and determined that a constituent of the client had fraudulently entered the contract knowing it could not be performed, in order to boost sales figures upon which bonuses would be based on his way out the door. May we settle the case immediately for the full amount requested, or even confess judgment on the contract claim, in order not to reveal the fraud reflected in the internal documents that would otherwise have to be disclosed?
A: Yes. Under these circumstances, the Model Rules contain no affirmative obligation for the lawyer who has discovered a completed fraud under the umbrella of privilege and Rule 1.6 that did not previously involve the lawyer’s services to reveal to the opposing party or court the information the lawyer has discovered. Of course, the lawyer may not participate in any obstruction of access to or falsification of evidence. See Rule 3.4. Therefore, if the case continues, and the documents and information showing the fraud are responsive to discovery requests, they will have to be produced when due.