Ethics Opinions

ETHICS OPINION NO. 45
OF THE MISSISSIPPI BAR

RENDERED Thursday, November 30, 1978

Editor's Note: See M.R.P.C. 1.6, 1.7, 1.8, 1.16, 2.1, 2.2, 2.3, 8.4.

CONFLICT OF INTEREST- A lawyer who is employed by a Claimant against a third party may simultaneously prosecute the interest of the insurance carrier (or Self-lnsurer) against said third party if the lawyer is retained and compensated directly by each party.

The Ethics Committee of the Mississippi State Bar has been requested to render an opinion on the propriety of a lawyer who is representing a Claimant against a third party defendant to also represent the interest of the Workmen's Compensation Insurance Carrier (or Self-lnsurer) against the same third party defendant in a personal injury case.

The Committee on Professional Ethics of the American Bar Association, in a Formal Opinion written May 27, 1950, stated:

An attorney who is employed by an insurance company to prosecute the company's subrogation claim against a third party may simultaneously prosecute the insured's claim for the amount not recoverable under his insurance if the attorney is retained and compensated directly by the insured.

Canon 5 of the Code of Professional Responsibility provides that "A lawyer should exercise independent professional judgment on behalf of a client." Ethical Consideration 5-15 charges the lawyer with the duty of weighing carefully the possibility that his judgment may be impaired or his loyalty divided if he accepts or continues employment of multiple clients having potentially differing interests. He should resolve all doubts against the propriety of the representation. If a lawyer accepted such employment and the interests did become actually differing, he would have to withdraw from employment of both clients.

Disciplinary Rule 5-105(C) provides that "a lawyer may represent multiple clients if it is obvious that he can adequately represent the interest of each and if each consents to the representation on the exercise of his independent professional judgment on behalf of each."

Disciplinary Rule 5-106 prescribes the rules for settling similar claims of clients and provides that "a lawyer who represents two or more clients shall not make or participate in the making of an aggregate settlement of the claims of or against his clients, unless each client has consented to the settlement after being advised of the existence and nature of all the claims involved in the proposed settlement, of the total amount of the settlement as of the participation of each person in the settlement."

It is the opinion of this committee that a lawyer may represent both a Claimant and an insurance carrier (or Self-Insurer) who has a right of action by way of subrogation through Claimant, against a third party defendant provided the attorney does so on a fee arrangement separately with each client and provided that it is disclosed to both the Claimant and the insurance carrier that the lawyer is represented both parties. (EC 5-16) If a conflict develops during the representation, the lawyer must withdraw from representation of both clients.