Can a lawyer who belongs to a title insurance fund represent a client pressing a claim against that same fund?

Plain-English summary

The inquiring lawyer was a member of Lawyers' Title Guaranty Fund and proposed to represent a client on a title insurance claim against the Fund. Because claims paid by the Fund could adversely affect every member's credit account, he asked whether his own financial interest as a member created an ethical problem. The claim was relatively small, with negligible impact on any one member.

The committee found no ethical objection, provided the lawyer made full and fair disclosure to the prospective client of his Fund membership and the conflict-of-interest indications. It grounded the duty in Canon 6, which required a lawyer at the time of retainer to disclose all circumstances of his relations to the parties and any interest in or connection with the controversy that might influence the client in selecting counsel. The committee noted that the Fund itself had taken a formal position that a member should feel free to represent a claimant against the Fund as vigorously as against any other title-assuring organization.

Currency note

This opinion was issued in 1966, before The Florida Bar's adoption of the 2006 revisions to the Rules of Professional Conduct. It applied the former Canon 6 on adverse and conflicting interests. A lawyer's own financial interest in a matter is now addressed by Rule 4-1.7 of the Rules Regulating The Florida Bar (Model Rule 1.7), which turns on whether the personal interest materially limits the representation and, where it does, requires informed consent. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against the current rules before relying on any specific requirement mentioned here.

Common questions

Q: Could the lawyer take the case at all, given that paying the claim would cost him as a Fund member?

A: Yes. The committee found no ethical objection to the representation, so long as the lawyer made full and fair disclosure of his membership and the conflict indications to the prospective client.

Q: What exactly did the lawyer have to disclose?

A: Under Canon 6, his Fund membership and the conflict-of-interest indications, made at the time of retainer, because they were circumstances that might influence the client in selecting counsel.

Q: Did the Fund's own position matter?

A: The committee noted that the Fund had taken a formal position that a member should feel free to represent a claimant against the Fund as vigorously as against any other title-assuring organization.

Background and rules framework

The opinion applied the former Canon 6, which addressed adverse and conflicting interests and required disclosure at retainer of any interest or connection that might influence the client's choice of counsel. The personal-interest conflict it describes is now addressed by Rule 4-1.7 of the Rules Regulating The Florida Bar (Model Rule 1.7), under which a lawyer's own interest can require informed consent where it materially limits the representation. The conflict here arose from the lawyer's membership stake in the very fund his client's claim was against.

Citations and references

Rules of Professional Conduct:

• Canon 6 [Canons of Professional Ethics; see current Rule 4-1.7]

See also

• FL Bar Ethics Op. 66-77: Conflict in a Multi-Car Crash
• FL Bar Ethics Op. 67-37: Conflicting Interests in a Legal Services Program

Source

• Landing page: https://www.floridabar.org/etopinions/etopinion-66-11/
• Original PDF: https://www-media.floridabar.org/uploads/2017/04/FL-Bar-Ethics-Op-66-11.pdf

Original opinion text

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

FLORIDA BAR ETHICS OPINION
OPINION 66-11
February 15, 1966
Advisory ethics opinions are not binding.
A lawyer may represent a client in connection with a title insurance claim against Lawyers' Title Guaranty Fund, even though the lawyer is a member of the Fund, if he makes full and fair disclosure to the prospective client.
Canon: 6
Chairman Kittleson stated the opinion of the committee:
A member of The Florida Bar requested the Committee's advice on his proposed representation of a client in connection with a title insurance claim against Lawyers' Title Guaranty Fund. He is concerned whether membership in the Fund, with the financial interest that attaches to membership, causes any ethical problem with respect to the proposed representation. In other words, he wants to know whether he may properly undertake to pursue the claim in behalf of the client, notwithstanding the fact that claims paid by the Fund can adversely affect all members' credit accounts in the Fund. The particular claim is relatively small, and its impact on any one Fund member would be negligible.
The Committee finds no ethical objection to the proposed representation, if full and fair disclosure is made to the prospective client of membership in the Fund and the conflict-of-interest indications. Canon 6, entitled "Adverse Influences and Conflicting Interests," provides that it is the duty of a lawyer at the time of retainer to disclose to the client all the circumstances of his relations to the parties, and any interest in or connection with the controversy, which might influence the client in the selection of counsel.
We are advised that Lawyers' Title Guaranty Fund has taken a formal and official position that a member should feel free to represent a claimant in handling a claim against the Fund as vigorously as he would handle a claim against any other title assuring organization.
The question is touched upon in an article entitled "Lawyers' Title Guaranty Funds: The Florida Experience," appearing in the November, 1965 issue of the American Bar Association Journal.