Can an insurance company select and pay the lawyer who represents a minor's guardian in getting court approval of an injury settlement?
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This page answers the general question as of 1962. Ezel answers yours: whether it's allowed on your facts, under the current rules of professional conduct in your state, with citations.
Plain-English summary
Opinion 23 (adopted July 20, 1962; addendum issued 1995) addressed an insurance company that negotiated an injury settlement with the natural guardian of an injured minor and then, with the guardian's consent, selected and employed a lawyer to commence the guardianship proceeding and obtain court approval of the settlement. The lawyer disclosed his relationship to the insurer, and the court denied him the right to appear for the guardian.
The Committee concluded the lawyer's actions violated Canons 6 and 35. Under Canon 6 (conflicting interests), the lawyer was attempting to represent incompatible interests: he could not be considered an impartial person advocating the settlement's fairness when the insurer had selected and employed him. The opinion treated the lawyer as in fact representing the insurer, the lay agency that had improperly intervened under Canon 35. It held that Canon 6's proviso allowing representation of conflicting interests with full disclosure and consent could not apply here, because it cannot be used to let a lawyer represent both sides of an adversary matter, nor to let a fiduciary consent to a conflict that would breach the fiduciary's duty. The Committee cited the court's protective action under Seaton v. Tohill. It added that it would not be improper for the insurer to agree to reimburse the guardian for legal fees, so long as the selection and employment of the lawyer were left entirely to the guardian's discretion.
Currency note
This opinion was issued in 1962 under the former Canons of Professional Ethics, before the Colorado Rules of Professional Conduct took effect on January 1, 1993, and before Colorado's 2008 revisions to those rules. A 1995 addendum mapped the analysis to Rule 1.7, in particular 1.7(c) (conflicts of interest), and Rule 1.8(f) (accepting fee payment from someone other than the client), and pointed lawyers to Opinion 91. 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 Treat this page as historical context, not current guidance.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 or requirement mentioned here.
Common questions
Q: Can the insurer pick the lawyer who represents the minor's guardian at the settlement-approval hearing?
A: No, under this opinion. The Committee concluded that a lawyer selected or employed by the insurer to represent the guardian was representing incompatible interests in violation of Canons 6 and 35.
Q: Can consent cure the conflict if the guardian agrees to the arrangement?
A: No, under this opinion. The Committee concluded the full-disclosure-and-consent proviso could not apply, because it cannot authorize representing both sides of an adversary matter and cannot let a fiduciary consent to a conflict that would breach the fiduciary's duty to the minor.
Q: Can the insurer ever pay for the guardian's lawyer?
A: Yes, within limits. The opinion concluded it would not be improper for the insurer to agree to reimburse the guardian for legal fees, provided the guardian alone selects and employs the lawyer.
Background and rules framework
The opinion applied the Canons of Professional Ethics: Canon 6 (representing conflicting interests, including its proviso for disclosure and consent) and Canon 35 (lay intermediaries). The 1995 addendum restates the analysis under the Colorado Rules of Professional Conduct, citing Rule 1.7 (Model Rule 1.7, conflicts of interest) and Rule 1.8(f) (Model Rule 1.8, compensation from one other than the client).
Citations and references
Rules of Professional Conduct:
- Colo. RPC 1.7, 1.7(c) / Model Rule 1.7 (conflicts of interest; per the 1995 addendum)
- Colo. RPC 1.8(f) / Model Rule 1.8 (payment of fees by a third party; per the 1995 addendum)
Cases:
- Seaton v. Tohill, 11 Colo. App. 211, 53 P. 170 (court protection of a minor's interests in settlement)
Other opinions cited:
- CBA Formal Opinion 91 (per the 1995 addendum)
See also
- CBA Formal Op. 12: Title Opinion Sold to a Lender's Borrower
- CBA Formal Op. 29: Lender's Lawyer Representing the Buyer, Seller, or Borrower
Source
- Landing page: https://www.cobar.org/ethicsopinions
- Original PDF: https://www.cobar.org/Portals/COBAR/repository/ethicsOpinions/FormalEthicsOpinion_23_2011.pdf
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