May a lawyer sue a hospital when a member of the lawyer's firm sits on the hospital district's commission?

Plain-English summary

A member of The Florida Bar served on the commission for a hospital district. The commissioners met monthly to set overall policy but did not take part in the day-to-day operation of the hospitals. A regular client of the commissioner-attorney's firm intended to sue a hospital in the district for malpractice arising out of allegedly negligent emergency-room treatment. The proposed suit would not involve any acts or decisions of the commission, and the hospital's malpractice insurer would have complete control of the litigation. Another member of the firm asked whether the partner's membership on the commission created a conflict that would prevent the firm from taking the case.

The committee concluded that a conflict of interest existed and that the representation would be improper. It noted that questions could arise about the insurance coverage, and that even setting those aside, a substantial recovery would raise the question of the hospital's insurance rates and produce publicity adversely affecting the hospital's reputation, so the commissioner-partner could have a direct interest arising from his responsibilities to the district as well as the firm's interest in its fee. Under EC 8-8 the commissioner should not represent the client, and under DR 5-105(D) neither should his partner. The committee added that the firm's suing a hospital in the district over which the commission has policy-making and supervisory responsibility would, at a minimum, create an appearance of impropriety that precluded the representation, citing Canon 9 and EC 9-2.

Currency note

This opinion was issued in 1974, before The Florida Bar's adoption of the 2006 revisions to the Rules of Professional Conduct. It applied the former Code of Professional Responsibility, including the Canon 9 "appearance of impropriety" standard that was not carried forward into the current rules. Treat this page as historical context, not current guidance. Verify against current Rule 4-1.7 before relying on any specific requirement mentioned here.

Common questions

Q: Could the firm take the malpractice case against the district hospital?

A: No. The committee concluded a conflict of interest existed and the representation would be improper.

Q: Why did the partner's commission seat disqualify the whole firm?

A: Under EC 8-8 the commissioner himself should not represent the client, and under DR 5-105(D) that disqualification extended to his partner.

Q: Did it matter that the hospital had insurance controlling the case?

A: The committee said the insurance did not isolate the commissioners; a substantial recovery would still raise insurance-rate questions and publicity affecting the hospital, so the commissioner-partner could have a direct interest.

Background and rules framework

The opinion applied EC 8-8 and DR 5-105(D) of the former Code of Professional Responsibility, which addressed a lawyer holding public office and the imputation of one lawyer's disqualification to others in the firm, together with Canon 9 and EC 9-2, which addressed avoiding the appearance of impropriety. The conflict-of-interest subject corresponds in current practice to Rule 4-1.7 (conflicts of interest, current clients) and Model Rule 1.7; the Canon 9 "appearance of impropriety" framework was not retained in the current rules.

Citations and references

Rules of Professional Conduct (as cited, former Code):

• CPR EC 8-8 (lawyer holding public office)
• CPR DR 5-105(D) (imputed disqualification within a firm)
• CPR Canon 9; EC 9-2 (avoiding the appearance of impropriety)

See also

No sibling opinions yet indexed.

Source

• Landing page: https://www.floridabar.org/etopinions/etopinion-74-8/
• Original PDF: https://www-media.floridabar.org/uploads/2017/04/FL-Bar-Ethics-Op-74-8-1.pdf

Original opinion text

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

FLORIDA BAR ETHICS OPINION
OPINION 74-8
June 14, 1974
Advisory ethics opinions are not binding.
It is improper for a lawyer to represent a client in a suit against a hospital when a member of the lawyer's firm is also a member of the commission for the hospital district in which the defendant hospital is located.
CPR: EC 8-8, DR 5-105(D), Canon 9, EC 9-2
Vice Chairman Sullivan stated the opinion of the committee:
A member of The Florida Bar is a member of the commission for a hospital district. The commissioners meet monthly to determine overall policy but do not participate in the day-to-day operation of any hospitals in the district. A commissioner's duties and responsibilities are in some ways analogous to those of a member of the board of directors of a corporation.
A regular client of the commissioner-attorney's firm intends to sue a hospital in the district for malpractice arising out of allegedly negligent treatment in the emergency room. The proposed lawsuit will not involve any acts or decisions of the commission or of any commissioner. The hospital has malpractice insurance which will fully cover any damages that may be recovered, and the insurance company will have complete control of the lawsuit. The commission will make no decisions regarding the handling of the litigation; there is no confidential information that could or would be made available to the law firm because one of its members is on the commission.
Another member of the firm asks whether his partner's membership on the commission presents a conflict of interest that will prevent his firm's representing the client in the malpractice action. We are of the opinion that a conflict of interest does exist and that such representation would be improper.
We note that questions could arise regarding the insurance coverage, including solvency of the insurer or a claim of non-cooperation, even though there is no question about coverage of the risk and policy limits. Even if those problems do not arise, the fact that the hospital has malpractice insurance does not necessarily isolate the commissioners from any responsibility or involvement. Certainly, a substantial recovery by the plaintiff would raise the question of the hospital's insurance rates and result in publicity adversely affecting the hospital's reputation. The attorney's commissioner-partner could, then, have a direct interest arising from his responsibilities to the hospital district as well as the obvious interest in his law firm's fee. The commissioner should not represent the client in such an action. EC 8-8. Therefore, his partner should not. DR 5-105(D).
The fact that the commissioner's law firm is suing a hospital in the district over which the commission has policy-making and supervisory responsibility will subject it to suspicion and criticism even though the firm handles the case with complete propriety, as we assume it would. We believe, then, that at a minimum the law firm's participation in the case would create an appearance of impropriety which precludes its accepting the representation. Canon 9, EC 9-2.