I’m not going to bring up the real world events upon which this is based because I don’t want it to get political.
Suppose, somebody (X) knows something about me that is potentially embarrassing. My lawyer, without my knowledge, decides to pay off Person X for their silence with his own funds.
Is this a violation of a lawyer’s professional ethics? Can the lawyer be disbarred?
It is basically a somewhat convoluted question of ethics. It really doesn’t matter that anyone is a lawyer. Nothing in the action has any bearing on any sort of legal action. It isn’t witness tampering, there isn’t any perversion of justice. Just a plain and simple payment for agreed non-action.
Where you may get an interesting ethical question is the money trail. If X has retained Y in some professional capacity, X is paying Y for something. If Y pays off someone with their own money, what is the ultimate expectation of any further payments from X, perhaps for future professional services? Y could argue (reasonably) that they were, at worst, helping maintain to relationship with X, and this action was nothing more than reasonable investment in that relationship. OTOH, if the amount of money is large with respect to the normal payments for professional services, it gets more messy. Does Y actually have an expectation that X will cover them for the money? How might they express this? Are there any implied threats here? That could get you into professional ethics problems pretty fast. Of course the professional relationship might include an assumption that Y is to look out for X’s interests wherever they see fit to do so. However then there would be a (reasonable) expectation of reimbursement, and a fee for services paid.
If Y is publicly claiming that there is no fee, no expectation, and it was purely his own action, it is hard to gainsay that without evidence. If perhaps someone came up with evidence that Y had lied about the nature of the professional relationship - and indeed X did pay them for their work, you would still be working hard to work up a real case of professional ethics violation. Perhaps bringing lawyers into disrepute. 
On the votemaster today, the question discussed is whether the payment should have been counted as a campaign contribution, not whether it was per se illegal. Under the hypothesis that the client in question was campaigning for a public office, needless to add.
Acting outside of instructions. A dicey area at the best of times and in this case, well beyond any reasonable or even lenient line of professional misconduct.
I guess this is the question. Was it outside of instructions? Of was there a much more generic set of instructions in place? Or was it so far removed from instructions for work performed that it could not be construed to have any relationship with the professional retention?
Yeah, but that gets us back the real world issue, not the hypothetical. There are other problems, but they are independent of the professional relationship between X and Y.
Yes, I understand that the real world incident adds a whole other wrinkle and to the greatest degree possible I’m trying to avoid that wrinkle. I’m wondering solely about the idea of a lawyer making such a payment, especially if it is without the client’s knowledge.
An interesting response Francis, on whether this could be an action taken by the lawyer based on a generic set of instructions. So if I go to my lawyer today and say “Look, if anybody ever turns up with any embarrassing facts about me, I want you to pay them off with your own funds. I won’t reimburse you; however, I think I’m paying you enough as a regular salary to justify any expense you might incur.”
I can’t see any Professional body finding that this was not outside instructions. He has purported to bind a party to whom he has a fiduciary duty without consent or knowledge.
I can imagine that Harvey Weinstein might have had standing instructions with his lawyers, next time a young starlet claims she had a surprise encounter with Harvey’s cock, find out what she wants and if she is willing to settle for less than 100K and an NDA, go ahead sign. Otherwise, tell me
Even in that scenario, there are specific standing instructions and it would be a breach of ethics not to inform the client at some reasonable point, most likely when he gets the invoice. In the example in the OP, it was a frolic of his own.
Ok. How about this hypothetical to avoid the real-world.
I’m a scientist. A person contacts my lawyer and says “I have information that BeepKillBeep fakes his experiments.” My lawyer pays them $10K to be silent.
1 - Suppose that this is done because the lawyer has such a deep respect for me and my work, and knows that the story couldn’t possibly be true, they simply want to protect me. I.e. without my knowledge or consent.
2 - Suppose as above, I’ve given some generic statement of instruction to my lawyer to protect me in such circumstances.
How legally binding is an agreement between A and B to not talk about C if C has no knowledge about said agreement?
That’s a good question too.
Why would it not be binding? Say I have a huge investment in company C, which is run by X. There is a big deal going down (say it is going for IPO, and I stand to make big) but I discover Z has some dirt on X. Dirt that could derail the IPO badly. I pay Z to keep quiet. X never need know.
The problem for the OP is that X and I have a professional relationship that is different to this. The problem seems to come down to be whether I have spent X’s money without his knowledge or direction in a situation where I have a professional obligation not to do any such thing without direction. In the above, I have not spent X’s money. I have simply made a deal with Z for my own gain. X happens to gain as well, but that isn’t my main concern.
To be totally fair to a certain point of view, is it possible that a large organization that is constantly getting into trouble could just say “ok, here’s your retainer. Please swat any minor problems and don’t bring them to my attention.”
I find it unlikely myself that a money grubbing lawyer would spend over 100k without informing their employer of the expense and getting an agreement for reimbursement and/or adding it to the next invoice. It’s too much money. Even if the retainer were a million a year, it’s too much to spend 100k on a whim like that. Especially if said employer is notoriously cheap and notorious for reneging on his agreements to pay his own attorneys.
I could see $250 lunch tabs getting covered, but not 6 figure settlements.
For that matter, isn’t agreeing to pay hush money a major decision that the client needs to be informed about? After all, hush money isn’t necessarily going to make a problem go away. Paying it makes you look guilty.
Washington rules of professional conduct Most states are the same
(e) A lawyer shall not, while representing a client in connection with contemplated or pending litigation,
advance or guarantee financial assistance to a client, except that:
(1) a lawyer may advance or guarantee the expenses of litigation, including court costs, expenses of
investigation, expenses of medical examination, and costs of obtaining and presenting evidence,
provided the client remains ultimately liable for such expenses; and
(2) in matters maintained as class actions only, repayment of expenses of litigation may be
contingent on the outcome of the matter.
I don’t see any ethical violation, other than the usual (i.e. “You seriously expect me to believe the money was not somehow reimbursed to the lawyer?”)
But
I guess the other question is - it seems obvious that if you pay a witness hush money you are committing a crime. (“Don’t tell them what you saw.”) What are the ethics of offering money to a victim not to talk? After all, a crime is an offense against the state, not the victim. The victim is just another witness. (There are plenty of cases, usually domestic abuse, where the victim is jailed for refusing to testify) If the crime were attempted murder, I don’t think the victim saying “I don’t want to press charges” will stop any prosecution. If a victim is offered money to not speak, how is that not witness tampering? How is that different from witness tampering by intimidation, threatening for example, “if you say anything, I’ll see you never work in this town again…”
Settling issues that could be remedied by the court system out of court for undisclosed sums happen regularly, often including non-disclosure forms that prevent the “victim” from talking about the deal. I know a couple people who’ve been wronged and then accepted money in return; signing that form was a condition of the offer. There’d be limitations, but it’s allowed under all sorts of conditions.
Part of the agreement the victim signs would be an admission that they lied about whatever crime there was. If there’s no evidence but the victim’s testimony, there’s nothing the state can do at that point.
For example, a rape victim could agree that they lied about the rape and accept a settlement so they don’t talk about the consensual sex they admit happened.
As for the questionable ethics of it…well, in America, lady justice may be blind, but she can smell money waved under her face. If you’re poor you very well may go to jail for a crime you didn’t commit, and if you’re rich you might get away with a crime you did.
It depends on what you say that is misleading:
But the question is, is it allowed in the example given in the OP?
Besides, if the agreement is “A won’t talk about it if B doesn’t talk about it” what sense does it make for B not to know about/condone said deal? Isn’t that how these deals go-Nobody brings the subject up?
I would view it as unethical.
A lawyer is supposed to act, within the law, for his or her client, on their instructions. They are supposed to be candid with their client on all matters related to their retainer.
A lawyer doing deals concerning their client’s affairs has a duty to inform the client and solicit their instructions - not just take that decision on their own.
From the commentary to the Ontario Rules:
For example - it could well be that the client believes that a payment made for silence would convict them in the public sphere of the “embarrassing acts” in question (members of the public may well reasonably say ‘if the person didn’t do the embarrassing thing, their lawyer wouldn’t pay for silence’). The lawyer, paying for silence, could thus compromise their client contrary to the client’s interests - should the fact of payment later be discovered.
The client may well, as with the Duke of Wellington, wish to tell the person with allegedly embarrassing information to “publish and be damned!”.