This article addresses the ethical and risk management implications of two insidious consequences of our dependence on technology. The first concerns lawyers’ duties when they first become (or should become) aware that hackers are trying to misdirect a settlement payment. The second arises from the ability of email users to attach “beacons” to emails that allow senders to learn whether and when an email has been opened by the recipient without informing the recipient that the beacon is in place.
Duties to Opposing Counsel
It should come as no surprise that the technology lawyers use provides hackers with new and sophisticated ways to misdirect settlement payments. When this occurs, the question posed is who should bear the risk of loss between two seemingly innocent parties. In Bile v RREMC, LLC, 2016 WL 4487864 (E.D. Va, Aug. 24, 2016), a federal district court recently concluded that in addition to the duty to protect the interests of the lawyer’s own client an attorney owed a duty to notify opposing counsel when the lawyer became aware that a hacker was targeting a settlement involved in one of the lawyer’s cases.
Bile involved the settlement of an employment discrimination claim. Six days after the settlement was reached the lawyer representing the plaintiff received an email that purportedly came from his client. The lawyer noted, however, that the email had a domain extension ending with “aoi.com” rather than “aol.com.” The email contained an instruction to wire the settlement to a particular offshore account in the client’s name in London. The lawyer called his client and confirmed that the client had not sent the email. The lawyer then simply deleted the phony email; he did not notify opposing counsel.