Ethics Counsel

Ethics Opinion No. 62

Adopted October 27, 1933

The Board is in receipt of a request for an advisory opinion, in which it is stated that a city in the State of Oklahoma had voted a bond issue for the purpose of constructing a waterworks system to be owned exclusively by the city; that the validity of the bond issue is now being questioned by eastern bond attorneys, although a considerable portion of the bonds have heretofore been approved, sold and delivered; that the city has used the proceeds of the bonds sold in the partial construction of the waterworks; that it is necessary that the remaining bonds be sold in order to complete the system; that it becomes necessary that the validity of the bond issue be determined in what is known as a test suit; that certain taxpayers of the city are willing to institute a suit against the city seeking to enjoin it from making the delivery of the last of the bonds, providing that the fees of their attorneys and the court costs be paid by the city; and that the city feels that it is necessary to determine the validity of the bond issue and is willing to defray the attorneys’ fees of the taxpayers, and the court costs.

The inquiry is as to whether or not it would be unethical for a member of the bar to accept employment from the taxpayers knowing that his attorney’s fees, and court costs, are to be paid by the city.

In response:

In one view of the situation, the member of the bar would be representing conflicting interests in that he would be contending against the city that the bond issue was invalid, while receiving his fees in the contest from the city.

Rule 8 of the Rules of Professional Conduct provides: “It is unprofessional to represent conflicting interests except by the express consent of all concerned, given after a full disclosure of the facts.”

The Board is of the opinion that if the taxpayers are aware that the city is eventually to pay the fees of their attorneys and the court costs, and if a full and frank disclosure is made in open court of all of the facts, it would not be unethical for a member of the bar to represent the taxpayers under the circumstances, it then being for the Court to determine whether or not it would proceed with the cause, provided, always, that the member of the bar shall not be a party to a collusive judgment, and shall in good faith and to the best of his ability, present the law and the facts most favorable to the contention of his clients, the taxpayer.