Settlement proposal covered by customary reservations: the lawyer remains subject to the Federal Act on the Freedom of Movement for Lawyers (LLCA), even when acting in their own name
A lawyer, registered in the cantonal register, was advising clients on tax matters. The fees were billed to a trust managed by a trustee, who was himself a lawyer. After several years, the clients terminated the mandate and contested the final invoices, which they considered excessive. In an attempt to reach an amicable settlement, the trustee sent the lawyer a settlement proposal on behalf of the clients, marked “without prejudice”.
After obtaining a waiver of professional secrecy, the lawyer filed a request for conciliation and submitted the email as evidence. The clients reported him to the Bar Commission, which found that he was acting within the scope of the LLCA (Federal Act on the Free Movement of Lawyers), and that the confidential email should not have been submitted in the proceedings.
The lawyer appealed to the Court of Justice, which rejected the appeal. He then brought the case before the Federal Supreme Court (hereinafter “FSC”), arguing that he was not subject to the LLCA in the context of recovering his fees, claiming that the LLCA only governs professional activities carried out on behalf of third parties.
The FSC dismissed this argument, reiterating that the LLCA applies where the disputed activity has a direct link with the practice of law. In disciplinary matters, a broad interpretation of the notion of professional activity is necessary in order to safeguard the dignity and reputation of the profession. The use of law firm letterhead or reference to one’s status as a lawyer are relevant indicators. In this case, the recovery of fees was a continuation of the legal mandate. The fact that the lawyer was acting on his own behalf did not remove the professional character of his actions.
Regarding the violation of Art. 12 let. a LLCA, the appellant argued that he was acting as a party and not as a legal representative, rendering the “without prejudice” mention inapplicable. However, under Art. 6 of the former Code of Conduct (aCSD), a lawyer may not submit a settlement proposal to the court without the opposing party’s consent; furthermore, Art. 26 aCSD provides that confidentiality between colleagues must be explicitly stated and such communications may not be used in proceedings.
Case law distinguishes between situations where both parties are represented by lawyers and those where a lawyer corresponds with an unrepresented party. In the latter case, confidentiality is only guaranteed if explicitly agreed. In this instance, the lawyer acted alone in his capacity as a lawyer and could not be treated as an unrepresented party. Accepting otherwise would undermine the principle of confidentiality.
Accordingly, the violation of Art. 12 let. a LLCA is upheld.
Written by Me Maxime Guffon