12.04. Lawyer as an Evaluator [Rule 2.3]

A lawyer as evaluator is a lawyer that is performing an evaluation of the client for a third-party to rely on.  It is that simple.  So, for example, if a lawyer represents the seller of a piece of land, performs a title search on the property, and then provides that title report to the buyer for the buyer to rely on – the lawyer has acted as an evaluator.[1]  Why have a rule for this very narrow situation?  Because it places the lawyer in a peculiar role.  Ordinarily we stress the importance of keeping client information confidential.  In this scenario, the lawyer is actually disclosing confidential client information.  Rule 2.3 gives lawyers some guidance in this unique situation.

Chris Client is looking to purchase a parcel of land to build a home.  Client goes to Leigh Lawyer and asks Lawyer to perform a title search on the property to determine whether the seller of the property has good title.  Lawyer performs the title search and discovers that the seller only has a life estate on the property.  Client does not go through with the purchase.  Is Lawyer acting as an evaluator in this scenario? [ABA Rule 2.3, Comment [2]]

No.  This is not an evaluation.  This is an investigation that Lawyer is performing on behalf of Client.  The key aspect of an evaluation is that the lawyer is being retained “by the person whose affairs are being examined.”[2]  In other words, an evaluation is when the lawyer has been hired by a client to evaluate the client’s affairs that will be relied upon by a third party.

A lawyer may provide an evaluation so long as “making the evaluation is compatible with other aspects of the lawyer’s relationship with the client.”[3]  Here is the example given in the Comments for when a lawyer should refuse to perform an evaluation:  the lawyer is representing a client in a matter alleging that the client defrauded an individual in a transaction, and the lawyer is asked to do an evaluation of the transaction for a third party to rely on.  In that situation, the representation of the client (defense in the fraud case) would make it inappropriate for the lawyer to evaluate that same matter for a third party.[4]  Short of this narrow circumstance, however, a lawyer can perform an evaluation.

Once a lawyer has performed the evaluation it may be that it contains no surprises or harmful information about the client that was unexpected.  In those situations, the lawyer is impliedly authorized to disclose the evaluation to the third party.  However, if the evaluation reveals information about the client that would be harmful to the client’s interests (or as the Rule puts it “is likely to affect the client’s interests materially and adversely”), the lawyer “shall not provide the evaluation unless the client gives informed consent.”[5]  The lawyer must give the client the opportunity to decide how to proceed before the evaluation is revealed.

One last point, a lawyer should have access to all the information necessary to make a complete and accurate report.  To the extent that the lawyer’s access to information is limited – either by the client or by a non-cooperating third party – the lawyer should note the limitations explicitly in the evaluation.  And, of course, the lawyer cannot ethically include false statements in the evaluation.[6]

[1] ABA Rule 2.3, Comment [1].

[2] ABA Rule 2.3, Comment [2].

[3] ABA Rule 2.3(a).

[4] ABA Rule 2.3, Comment [3].

[5] ABA Rule 2.3(b).

[6] ABA Rule 2.3, Comment [4].