[textbook]Traversing the Ethical Minefield Problems, Law, and Professional Responsibility by Susan R. Martyn (z-lib.org)(1) (1)

be determined by the court as a matter of law. Once any necessary factual disputes have
been resolved, the court must determine, based on the factors we have set out, whether the
attorney’s conduct was a clear and serious breach of duty to his client and whether any of
the attorney’s compensation should be forfeited, and if so, what amount. Most
importantly, in making these determinations the court must consider whether forfeiture is
necessary to satisfy the public’s interest in protecting the attorney-client relationship. . . .
Problem
10-5. A real tragedy. An automobile accident resulted in the death of Wife and serious
injuries to Daughter and Grandmother. Martyn & Fox undertook the representation of
Daughter and Grandmother, as well as the Estate of Wife. Defendant’s insurer offers policy
limits of $1,000,000 to settle all claims. Should Martyn & Fox accept the offer?
The Law Governing Lawyers:
Loss of Fee or Other Benefits
In Burrow, the Supreme Court of Texas explained the jurisprudential underpinnings of
another equitable remedy for breaches of fiduciary duty: fee forfeiture. In Liggett, the
Indiana Supreme Court granted a similar remedy: rescission of a transaction with a client,
with concomitant loss of benefits to the lawyer. Both courts also cite the Rules of
Professional Conduct, which restate basic fiduciary duties. In this note, we examine some
of the details of these well-established remedies to understand their relationship to other
legal and equitable remedies provided to clients whose lawyers breach fiduciary duties.
Loss of Contractual Benefits
In refusing to enforce a contractual provision between lawyer and client, Liggett illustrates
that agency rules, such as a presumption of undue influence, require close scrutiny of
business transactions between lawyers and clients in order to give lawyers incentives to
preserve fiduciary duties.
This remedy can arise as an affirmative defense, as in Liggett, or a claim for an
accounting or a constructive trust. Clients also can seek to void a contract when a lawyer
sues a client for a fee. 1
Fee Forfeiture
Although Burrow represents a contemporary example of the usefulness of fee forfeiture, the
remedy itself, like the constructive trust, is quite old. In a bankruptcy case, Judge Learned
Hand traced the lawyer’s duty not to represent opposing interests back three centuries, and
found that the usual consequence of doing so had been that the lawyer was “debarred from
receiving any fee from either, no matter how successful his labors.” 2 Burrow represents the
well-settled view that the forfeiture which follows from breach of the contract does not
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