Friday, April 9, 2010

California Appeals Court Accepts Ethical Screening

Less than a month ago, the California Bar rejected recommendations by its own working group to adopt a modified version of ABA Model Rule 1.10, which would allow for ethical screening of lateral hires. But that hasn't settled the matter -- This week, Los Angeles' 2nd District Court of Appeal came down in favor of screening.

The court ruled that the presumption of imputed knowledge was rebuttable. As reported by The Recorder: "The firm only needs to prove "by evidence," the court held, that the tainted lawyer's confidential client information wasn't shared with others on the staff who represent an opposing party."

The ruling calls out the fact that ethical walls have been shown to be effective in several contexts and that the modern practice of law doesn't necessarily mean that knowledge is imputed: "These are not attorneys discussing their cases regularly, passing each other in the hallways or at risk of accidentally sharing client confidences at lunch."

Finally, the court also noted that these scenarios should be reviewed on a case-by-case basis and that the strength of an ethical screen or wall matters: "The more steps a firm has taken to prevent any disclosure, however, the more likely it is that a court will find the ethical wall to be sufficient." This bodes well for the increasing number of firms who are making use of electronic ethical screening software for confidentiality enforcement and information risk management.

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