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David Engels, a high school teacher, was injured in a car accident involving Acme Paper Company (Acme). He is unsatisfied by his representation, in the personal injury claim against Acme Paper Company, by Harriet Cooperman, a senior partner at the law firm of Cooperman and Jones . He filed a complaint against Cooperman with the New York State Bar. The New York State Bar charges Cooperman with violation of N.Y. Code of Professional Responsibility (hereinafter N.Y.C.P.R. ) DR 5-105 (Consol.1983) in accepting employment whereas Aher professional judgment will be or is likely to be affected by the representation of differing interests@. In addition, the New York State Bar contends that she violated N.Y.C.P.R. DR 5-108 (consol.1983) in failing to terminate her representation of Engels due to a conflict of interests arising from the former representation of Acme. Furthermore, the New York State Bar charges that Cooperman violated N.Y.C.P.R. DR 4-101 in using confidential information. Finally, the New York State Bar charges Cooperman with violation of N.Y.C.P.R. DR 5-101(Consol.1983) in failing to inform Engels that her professional judgment may be affected by her own business interests.

Engels asked Cooperman to represent him and Ms Rubin, one of his colleagues, in a personal injury claim on September 8, 1993. Ms Simpson, the paralegal who works for Cooperman, conducted the initial inquiry. Upon the facts, she informed Engels that he could have a claim against Ms Rubin, who was distracted by demonstrators when the accident took place. He answered by refusing to assert any claim against her. While being interviewed by Cooperman, he was, again, asked if he wanted to sue Rubin and if so, Cooperman could only represent one of them because of the prohibition set forth in the N.Y.C.P.R.. Engels reaffirmed his will to sue the truck driver company and not Rubin. Rubin and Engels, then, signed a fee agreement that contained a waiver of conflict of interests enabling Cooperman to represent both of them but he realized this only when problems arose with Cooperman. At some point in the litigation, James Doran, the attorney representing Acme Paper Company, filed a motion to disqualify Cooperman alleging a conflict of interests. This motion to disqualify was based on a former representation of Acme by Gina Matthews, a corporate partner of Cooperman and Jones, which ended in March 1993. Matthews participated in the reorganization of Acme, a self insurer, hence, she was informed of the financial status of the company. Engels was never informed of these different issues. The case was settled in October 1995 for less than Engels expected because Rubin=s contributory negligence reduced his recovery.

I. Whether Rubin and Engels have differing interests that prohibited Cooperman from representing the two of them.

If so, was the waiver valid?

II. Whether the former representation of Acme creates a conflict of interests between Cooperman and Acme.

A. Is the present litigation substantially related to the former one?

B. Does this conflict of interests have affected Cooperman=s professional judgment while representing Engels?

I. Cooperman violated N.Y.C.P.R. DR 5-105(A) and (C) (Consol.1983) in that she did not fully disclosed all the effects of the potential conflict of interests between Engels and Rubin.

II.A. The present litigation is substantially related to the prior one in that the confidences obtained are substantially related to the present litigation.

B. The motion to disqualify Cooperman did affect her professional judgment and created a conflict of interests between her and Engels.

N.Y.C.P.R. DR 4-101 (B) (3) (Consol.1983). Preservation of Confidences and Secrets of a Client.

N.Y.C.P.R. DR 5-105 (Consol 1983). Refusing to accept or Continue Employment if the Interests of Another Client May Impair the Independent Professional Judgment of the lawyer.

N.Y.C.P.R. DR 5-108 (Consol.1983). Conflict of interest- Former Client.

N.Y.C.P.R. DR 5-101 (Consol.1983). Refusing Employment When the Interests of the Lawyer May Impair His Independent Professional Judgment.

I. The New York State Bar will have to prove that Cooperman violated N.Y.C.P.R. DR 5-105(A) and (C) (Consol. 1983). N.Y.C.P.R. DR 5-105(A) and (C) state that a lawyer Ashall decline a proffered employment if it will involve him in representing differing interests@ unless Ahe obtained a consent after full disclosure@. To disqualify a lawyer under N.Y.C.P.R. DR 5-105 (Consol. 1983), the State Bar will have to show that Cooperman did not obtain a consent after full disclosure. The language of N.Y.C.P.R. DR 5-05 (Consol. 1983) is imperative. As soon as the lawyer does not act in accord with the rule , the court may disqualify her. In N.Y.St.Bar.Assn.Comm.Prof.Eth, Informal op. 560 (1984 WL 50015), the committee on Professional Ethics decided that Aif it is obvious to the lawyer that he can adequately represent the interests of each client and if each client consents to the representation after full disclosure of the possible effect of such representation on the exercise of his independent professional judgment on behalf of each, he may accept or continue the representation.@ For a lawyer not to be sanctioned, consent after full disclosure is required, but it appears from this opinion that the court will not sanction the dual representation if there is no prejudice to any interest of each client. In the Matter of Kelly, 23 N.Y.2d 368, 244 N.E.2d 456, 296 N.Y.S.2d 937 (1968), the court decided that Awhen the conflict of interest between two parties as to a particular subject matter, the likelihood of prejudice to one party may be so great that misconduct will be found despite disclosure and consent.@ The court reasoned that even if the client is fully aware of the potential conflict, the dual representation will be sanctioned if the conflict is so profound or if policy reason commands the sanction. In Schenk v. Hill, Lent & Troescher, 140 Misc.2d 288, 530 N.Y.S.2d 486 (1988), the court decided Athat disqualification was required if the consent of the clients did not reflect full understanding of the legal rights being waived@. The majority of cases, thus, establish a clear cut view of what the rule requires and how disciplinary measures will be decided. Each court will have to decide upon the showing of facts that either consent and full disclosure are met under the rule or not.

In our case, the two clients had a conflict of interests because Engels could sue Rubin for negligence. Thus, the question is whether their waiver is valid under the circumstances. The cases cited above have all a common trait. The conflict of interests must result in a profound prejudice. If it is so, even consent after full disclosure will not suffice for Cooperman not to be sanctioned. It is more likely than not that the prejudice was important, in the sense that his recovery was reduced due to the contributory negligence of Rubin. Furthermore, it is possible to question the full understanding of Engels when he signed the waiver relinquishing his right to sue Rubin. Engels stated that he did not realize that he signed a waiver to sue Rubin, even though he fully realized that a potential conflict of interests would arise from the dual representation. Thus, the New York State Bar can establish that Cooperman did not obtain an informed consent from Engels.

Even though Engels signed the fee agreement, thus waiving any potential conflict of interests, the State should be able to prove his consent was not obtained under full disclosure of all the effects of the dual representation and that even if the waiver was valid, the prejudice was so profound that the consent ought to be declared void.

Nevertheless, Cooperman may argue that the consent obtained from Engels is valid because she actually fully disclosed all the effects of a potential conflict of interests between him and Rubin. Furthermore, Green v. Green, 47 N.Y.2d 447, N.E.2d 1355, 391 N.Y.S.2d 379 (1979), the court decided that a conflict of interests arising from a dual representation will Ararely be sanctioned even after full disclosure has been made and consent of the parties obtained@. In Green v. Green, the firm was not disqualified on the grounds that a conflict of interests existed between the two clients but on the grounds that two lawyers were formerly employed by the adverse party=s law firm. Finally, Cooperman may contend that Amere representation of multiple parties does not alone pose a conflict of interests requiring separate counsel@. Allegretti-Freeman v. Baltis, 205 A.D.2d 859, 613 N.Y.S.2d 449 (1994). This will be rejected because all the evidence prove that Cooperman was aware of the differing interests. But the first argument is well founded and there is a chance that the court will accept this argument.

II. A. The New York State bar will have to prove that Cooperman violated N.Y.C.P.R. DR 5-108 (A) and (C) and DR 4-101. A Conflict of interest is created if the subject matter of the present litigation is substantially related to the former one and/or if the lawyer uses Aconfidences or secrets of the former client@. A lawyer is prohibited from using confidences acquired while representing a client without his consent.

Thus, N.Y.C.P.R. DR 5-108 establishes a two requirement standard. On one hand, the party seeking disqualification must show that the subject matters of the two representations are substantially related. On the other, it will have to show that the attorney used confidences or secrets for the advantage of his present client.

It is not clear from the language of the rule if the rule is a cumulative requirement or not. Does the State Bar have to show that Cooperman violated N.Y.C.P.R. DR 5-108 (A) and (C) or does it have to show that Cooperman violated only one of the prohibitions? It is a general rule that a lawyer owes a fiduciary duty to the clients he has represented Abroader in scope than the attorney-client evidentiary privilege@. See Green v. Green. A lawyer may not undertake to represent a client, when it will adversely affect the interests of a former client. It has been decided that if a lawyer was able to know the financial status and the organization structure of the former client, it does not mean that there is a substantially related matter. See N.Y.St.Bar.Assn.Comm.Prof.Eth., Informal op. 628 (1992 WL 465630. The New York State Bar Association Committee stated that when it is shown that the matters are substantially related, it is Apresumed that the lawyer obtained confidences and secrets in the prior representation@. It continued in stating that the substantial relationship test is not applicable anymore due to the amendments to the rules in 1990. N.Y.C.P.R. DR 5-108 prescribes an alternative requirement according to the Committee. In Solow v. Grace, 83 N.Y.2d 303, 632 N.E.2d 437, 610 N.Y.S.2d 128 (1994), the court decided that when there is no adverse and substantially related matter, the lawyer should be disqualified. But, in the case, the lawyer had left the firm before he could have gather any confidential information. Furthermore, the court of appeals decided that when a lawyer obtained confidences, there was an Airrebuttable presumption that the confidences are shared among the attorneys employed by firm@. It is not necessary to show a substantially related matter exists between the prior representation and the present one. In Neighborhood Supermarket Chain v. Epic Security Corp., 162 Misc.2d 218, 616 N.Y.S.2d 567 (1994), the court clearly stated that the attorney will be disqualified if a substantially related matter between prior representation and present representation is shown or Awhen counsel had access to confidential material substantially related to litigation@. Thus it appears that even though it is not necessary to show that the attorney violated N.Y.C.P.R. DR 5-108 (A) (1), it is nevertheless required to prove that the confidences obtained are substantially related to the present litigation. Finally, N.Y.C.P.R. DR 4-101 provides that a lawyer shall not use confidences or secrets without the consent of the client. This is an imperative and explicit rule that once violated results in sanctions.

The former representation of Acme was for the reorganization of the company. It would appear that the two litigations are not substantially related. But if the subject matters are not substantially related as to the issue, the financial data that Matthews may have obtained is substantially related to the litigation. Acme is a self insurer, which means that any financial data acquired would be of interest in an personal injury claim. The New York State Bar will prove that the matters are substantially related insofar as it concerns the confidences obtained by the prior representation. Furthermore, the courts have established an irrebuttable presumption that once one attorney of a firm happens to know something, he has shared the information with the firm. The fact that it was Matthews who was the attorney hired by Acme will not bar any disciplinary measures. Finally, the prohibition set forth in N.Y.C.P.R. DR 4-101 is violated because Matthews or Cooperman did not ask Acme its consent to use the information.

Even though, it may be difficult for the New York State Bar Association to prove that the two litigations were substantially related, it won=t have any problem to prove that Cooperman violated N.Y.C.P.R. DR 5-108 (A) (2). Furthermore, Cooperman did not obtain the consent of Acme to use the confidences acquired. Finally, even if Cooperman was not the attorney representing Acme, under a stable jurisprudence, the court will sanction her.

Yet, Cooperman can argue that N.Y.C.P.R. DR 5-108 establishes a cumulative requirement to be sanctioned by the disciplinary court . She can argue that the matters are not substantially related and that the confidences that Matthews obtained are not related to the case. For, there is a great difference between a personal injury claim and Acme=s reorganization. But this will be rejected because there is the financial data obtained by Matthews is related substantially to the present matter.

B. If the New York State Bar establishes that there was a conflict of interests between Cooperman and Acme, then Doran=s motion to disqualify her can be a good reason for Cooperman to have a conflict of interests with her own client. Thus, the New York State bar will have to prove that Cooperman violated N.Y.C.P.R. DR 5-101(A) and (C) (Consol. 1983).

The rule requires that if the exercise of the lawyer=s professional judgment may be affected by his business interests, he shall refuse the employment unless he obtained the consent of the client after full disclosure. The language of the rule is imperative and as soon as the lawyer does not fully disclosed any event, the lawyer is under the threat to be sanctioned.

The courts when addressing this issue will only examine if full disclosure has been performed. If there is no full disclosure, there cannot be a consent. In N.Y.St.Bar.Assn.Comm.Prof.Eth, Formal op. 1991-1 (1991 WL 639875), the committee decided that only full disclosure can result in Aan informed and knowing consent@. It added a requirement to the language of the rule. The consent has to be informed. That means that the lawyer is under an obligation to disclose any fact relevant to the matter for the client to decide that the lawyer will continue his representation. In People v. Gromberg, 38 N.Y.2d 307, 379 N.Y.S.2d 769 (1975), the court of appeals decided that N.Y.C.P.R. DR 5-105 requires that the lawyer is Aunder an ethical obligation to disclose to@ his Aclients, at the earliest possible time , any conflicting interests that might cloud their representation. Disclosure is not enough. The lawyer may not act for the client unless the client has given his informed consent to further representation.@.

Cooperman did not tell to Engels that Doran had filed a motion to disqualify her. Under the rule, he was entitled to know and Cooperman was under the strict obligation to disclose this action against her. Thus, without full disclosure, Engels could not have given her his consent much less his informed consent.

Accordingly, there was a conflict of interests because it can be assumed that the way she handled Engel=s case was due to the motion to disqualify. Furthermore, even if there was no conflict of interests between Cooperman and Engels, Cooperman violated the rule and the State Bar will prove more likely than not that she did not disclose the relevant facts.

Cooperman may argue that she thought the motion was not meritorious and thus did not think that it was necessary to tell her client that an action was brought against her. This counter-argument is frivolous, because the language of the rule is imperative.

The attorney failed to respect all the requirements set forth in the N.Y.C.P.R.. Cooperman failed to disclose under N.Y.C.P.R. DR 5-105 and 5-101 the relevant facts to her client for him to make an informed consent. The language of these two rules cannot be construed liberally. Cooperman may believe that she fully disclosed the effects of the dual representation but she violated the rule because the prejudice to Engels was too profound. She violated N.Y.C.P.R. DR 5-101 in that she did not disclose any event that was relevant to the representation. It is a violation per se in that as soon as Cooperman did not respect the requirement, she would be sanctioned. She also violated N.Y.C.P.R. DR 5-108 in representing Engels against the interests of a former client of the firm. The rule does not lie down a cumulative requirement that the State Bar has to prove. It is sufficient that Cooperman violated one branch of the rule. It is not necessary to show that she actually used the confidences and both N.Y.C.P.R. DR 5-108 and DR 4-101 prohibits the use of confidences from an a former client or a present one The court will likely decide that the matters were substantially related with regard to the use of the confidences that Matthews obtained.