Confidentiality of Evaluations

Confidentiality of Evaluations

Delivering an evaluation to a lender, a buyer, or any other outsider means telling that outsider something about the client's affairs. Rule 2.3(c) controls how much. It provides that, except as disclosure is authorized in connection with a report of an evaluation, information relating to the evaluation is otherwise protected by Rule 1.6.¹ The sentence sets a baseline and carves out one exception. The baseline is Rule 1.6, the general duty of confidentiality that already shields what a lawyer learns about a client. The exception reaches disclosure made in connection with the report of the evaluation, and everything outside the report stays under the baseline.

The exception exists because a report cannot say nothing. A title opinion for a lender has to state what the search found, and a good-standing letter has to state what the company's records show. Each statement draws on information the lawyer gathered from or about the client. The rule therefore treats the disclosure as one the client has authorized, either explicitly, when the client tells the lawyer what the report may contain, or impliedly, by asking for an evaluation that an outsider will read. Professors Hazard and Hodes and attorney Jarvis describe paragraph (c) as a reminder that an evaluation departs from the normal rules of confidentiality, and that the client authorized the departure.² The same authorization has a second effect. To the extent the client has authorized release of information needed for the report, the client has also waived the attorney-client privilege.³

Because the authority comes from the client, paragraph (c) does not give the lawyer or the recipient a free-standing exception. Two opposite mistakes follow from forgetting this. The first treats the lawyer's role as evaluator as a source of duties to the lender or buyer that override Rule 1.6, so that the recipient may claim whatever the lawyer knows. The second treats every disclosure to a nonclient as a violation, even though the client asked for the report. The correct view sits between them. The client's authorization opens the door, and the door opens only as wide as that authorization.

The limit follows from the purpose of the authorization. A client who requests a title opinion has agreed that the lender may learn what the opinion needs. The client has not agreed that the lender may learn everything else the lawyer knows from the representation. If the authorization stretched that far, a consent given for one purpose would become a general waiver, and the privilege waiver would grow with it. The exception is limited and does not extend beyond what the report requires. Hazard, Hodes, and Jarvis put the measure this way: the release of confidential information should be no greater than authorized in order to carry out the evaluation fairly and competently.⁴ So when a fact is needed for a fair and competent evaluation, its disclosure is authorized, and when it is not needed, it stays protected.

When an exam stem has the lawyer put something extra into the letter, ask whether the evaluation needs that information.

Rule 2.3(c) also shows how the Model Rules refer to one another. It states no confidentiality standard of its own, and for everything outside the report it sends the lawyer back to Rule 1.6.⁵ A useful habit is to treat Rule 1.6 as the baseline whenever a role-specific rule mentions confidentiality. The role-specific rule identifies what the client has authorized, and Rule 1.6 governs whatever remains.