If an insured objects to the lawyer the insurer hired to defend him, must the lawyer withdraw?

Plain-English summary

On the agreed facts, an attorney was hired by an insurance company to represent the insured in a slip-and-fall case, and the insured objected to the company's retention of that attorney on several grounds. The Committee limited itself to the attorney's ethical obligations, declining to address whether the insurer was contractually obligated to select different counsel.

The opinion concluded that the insurer's initial selection of counsel without the insured's request or preapproval was proper. Relying on ABA Formal Opinion 282 (1950), it explained that the insurance contract requires the insured to forward process to the company so the company may provide the defense, which includes retaining and compensating the lawyer, and that the essential point is that the lawyer so employed represents the insured as his client with undivided fidelity. The attorney therefore breached no duty by beginning the defense without first obtaining the insured's approval.

The opinion held that once the insured placed the attorney on notice that he objected to the continued representation, the attorney was ethically obligated to accommodate the client's wishes and withdraw. It grounded this in DR 2-110(B)(4), which makes withdrawal mandatory when the lawyer is discharged by the client. Citing DR 2-110(A)(2), which requires reasonable steps to avoid foreseeable prejudice to the client on withdrawal, the opinion concluded the attorney also had a concurrent obligation to recommend that the insured seek separate counsel about the possible ramifications of discharging insurer-selected counsel, including effects under the insurance policy.

Currency note

This opinion was issued in 1989, before the Alaska Bar Association's adoption of the 2009 revisions to the Alaska Rules of Professional Conduct (and before Alaska adopted the Rules of Professional Conduct at all; it applies the former Code of Professional Responsibility). Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Can an insurer pick the defense lawyer without the insured's approval?

A: The opinion concluded the insurer's initial selection of counsel without the insured's preapproval was proper, because the insurance contract authorizes the company to provide the defense, and the lawyer represents the insured with undivided fidelity.

Q: If the insured objects to that lawyer, what must the lawyer do?

A: The opinion concluded that once the insured notifies the attorney he objects to the representation, the attorney must withdraw under DR 2-110(B)(4), which makes withdrawal mandatory when the lawyer is discharged by the client.

Q: Does the lawyer owe the insured anything on the way out?

A: Yes. The opinion concluded the attorney must take reasonable steps to avoid foreseeable prejudice under DR 2-110(A)(2) and must recommend the insured seek separate counsel about the policy consequences of discharging insurer-selected counsel.

Background and rules framework

The opinion interpreted the former Alaska Code of Professional Responsibility, applying DR 2-110(B)(4) (mandatory withdrawal on discharge by the client) and DR 2-110(A)(2) (duty to avoid foreseeable prejudice on withdrawal), the analogs of today's Model Rule 1.16. It relied on ABA Formal Opinion 282 (1950) for the principle that an insurer-retained lawyer represents the insured as the client.

Citations and references

Rules of Professional Conduct (former Code; cf. Model Rules):

• DR 2-110(B)(4) (mandatory withdrawal on discharge by the client) (cf. Model Rule 1.16(a)(3))
• DR 2-110(A)(2) (steps to avoid foreseeable prejudice on withdrawal) (cf. Model Rule 1.16(d))

Other opinions cited:

• ABA Formal Opinion 282 (1950), lawyer retained by an insurer represents the insured with undivided fidelity

See also

• Alaska Ethics Op. 90-2: Insurer-Directed Offer of Judgment
• AK Bar Ethics Op. 99-3: Insurer Staff Counsel
• AK Bar Ethics Op. 98-1: Contacting a Defendant's Insurer

Source

• Landing page: https://alaskabar.org/ethics-discipline/ethics-opinions/adopted-ethics-opinions-chronological/
• Original PDF: https://alaskabar.org/wp-content/uploads/89-3.pdf

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

ALASKA BAR ASSOCIATION
ETHICS OPINION 89-3

RE:

Ethical Obligations of the Attorney Hired by an Insurance Company
to Defend its Insured to the Insured When Insured Objects to the
Attorney
AGREED STATEMENT OF FACTS

Attorney was hired by insurance company to represent the insured in a
slip and fall case. The insured objected to the insurance company's retention
of Attorney on several grounds.
QUESTION PRESENTED
What are the ethical obligations of an attorney retained by the insurance
company when the insured objects to the retention of such attorney?
DISCUSSION
Whether the insurance company is obligated to select different counsel
because of objections by the insured is not before this committee. Similarly
this committee will not address the insurance company's obligations pursuant
to the insurance contact. We rather only examine the ethical obligations of the
attorney retained by the insurance company to carry out the insurance
company's defense obligations to its insured.
In ABA formal Opinion No. 282 it was determined that under the Canons
of Professional Ethics which were in effect at the time of the opinion, i.e., May
27, 1950, that an attorney could accept employment from an insurance
company to represent the company's insured within the limits of the policy
without either the request or preapproval of the insured. The opinion stated in
pertinent part:
Whenever the insured is served with the court process as a
defendant, the contract of insurance expressly requires
him/her to forward such process to the company so that the
company may provide the means of defense. It is elemental
that this includes retaining and compensating the lawyer at
the company's expense.

-1-

Under certain circumstances a person may by contract clothe
another with power to retain a lawyer to conduct a defense.
Especially may this be done when, as here, the power is
coupled with an interest resulting from covenants of
insurance . . . The essential point of ethics is that the lawyers
so employed shall represent the insured as his client with
undivided fidelity as required by Canon six.
Thus it is clear that the initial selection of Attorney by the insurance
company without preapproval by the insured is appropriate. Thus Attorney did
not breach any ethical obligations to the insured by not first seeking approval
from the insured before he began his defense.
However, after the defense was begun the insured placed Attorney on
notice that he objected to Attorney's continued representation. It is the opinion
of this committee that once an attorney is placed on notice that his client, in
this case, the insured, desires a dissolution of the representative relationship,
the attorney is ethically obligated to accommodate his client's wishes. Attorney
is consequently ethically obligated to withdraw from representing the insured.
The committee bases this conclusion upon DR 2-110(B)(4). DR 2-110(B)
sets forth the circumstances under which withdrawal as counsel is mandatory:
A lawyer representing a client before a tribunal, with its
permission if required by its rules, shall withdraw from
employment, and a lawyer representing a client in other
matters shall withdraw from employment, if: . . .
(4) He is discharged by his client.
Whenever an attorney withdraws from representation there are certain
precautions which must be taken to protect the interests of his client. DR 2110(A)(2) sets forth the responsibilities of an attorney when he withdraws from
employment. DR 2-110(a)(2) states in pertinent part:
. . . a lawyer shall not withdraw from employment until he has
taken reasonable steps to avoid foreseeable prejudice to the
rights of his client . . . .

It is the opinion of this committee that this requirement establishes an
ethical obligation on the art of Attorney to recommend that the insured seek
the advice of separate counsel with regard to the possible ramifications of
discharging the attorney selected by the insurance company.
CONCLUSION
When the attorney retained by the insurance company to represent an
insured is informed by the insured that the insured does not want the attorney
to represent him, the attorney has an ethical obligation to withdraw from such
-2-

representation. The attorney also has a concurrent obligation to recommend
that the insured seek legal counsel with regard to whether the insured's
discharge decision may have ramifications under the insurance policy.
Approved by the Alaska Bar Association Ethics Committee on July 13, 1989.
Adopted by the Board of Governors on October 27, 1989.

manual61
G:\DS\EC&OPS\OPINIONS\89-3.DOC

-3-