Can an insurer's lawyer also represent the claimant in a friendly suit or wrongful-death settlement needing court approval?

Plain-English summary

The inquiry involved two situations where an insurance company agreed to settle a claim requiring court approval. First, the insurer agreed to settle a minor's claim, and a "friendly suit" was commenced for approval; the question was whether the lawyer who represents and is paid by the insurer could present the claimant's position to the court, by pleadings or in person. Second, the insurer agreed with a widow and personal representative to settle a wrongful-death claim (the estate's only asset), and the question was whether the insurer's lawyer could represent the personal representative and prepare the papers opening the estate and seeking approval as in the estate's best interest.

The committee, one member dissenting, answered "no" to both. It reasoned that the claimant's interest (whether a minor or a personal representative) is the highest possible settlement, while the insurer's interest is to pay as little as possible; the insurer's lawyer is employed to seek judicial approval of the settlement. Representing both the claimant and the insurer would violate DR 5-105(A) and EC 5-1 and place the lawyer in a compromising position as to DR 5-107(B). The committee acknowledged claimants are often unrepresented in settlement negotiations, but concluded the Code prevents the insurer's lawyer from filling that need. The dissenting member believed it was not important who prepares the papers, but that if the insurer's lawyer does, he must advise the court he does not represent the claimant so the court can protect any minors or incompetents.

Currency note

This opinion was issued in 1977, before The Florida Bar's adoption of the 2006 revisions to the Rules of Professional Conduct. It applied the former Code of Professional Responsibility, which has since been replaced. Treat this page as historical context, not current guidance. Verify against current Rules 4-1.7 and 4-1.8 before relying on any specific requirement mentioned here.

Common questions

Q: Can the insurer's lawyer represent the claimant in a friendly suit to approve a minor's settlement?

A: The opinion concluded no; representing both the claimant and the insurer would violate DR 5-105(A) and EC 5-1.

Q: Does the same answer apply to a wrongful-death settlement needing probate approval?

A: Yes. The opinion concluded the insurer's lawyer may not also represent the personal representative seeking court approval of the settlement.

Q: Does it matter that the claimant has no lawyer of his own?

A: Per the opinion, no; while no one can force a competent claimant to hire a lawyer, the Code prevents the insurer's lawyer from filling that need.

Background and rules framework

The opinion applied EC 5-1, DR 5-105(A), and DR 5-107(B) of the former Code of Professional Responsibility, addressing conflicting interests and the influence of a third party who pays the lawyer. Those subjects correspond to Model Rule 1.7 (concurrent conflicts of interest) and Model Rule 1.8 (a third party's payment for the representation); the current Florida counterparts are Rules 4-1.7 and 4-1.8.

Citations and references

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

• CPR EC 5-1; DR 5-105(A); DR 5-107(B) (conflicting interests; third-party influence)

See also

• FL Bar Ethics Op. 76-18: Assistant City Attorney Conflict

Source

• Landing page: https://www.floridabar.org/etopinions/etopinion-76-2/
• Original PDF: https://www-media.floridabar.org/uploads/2017/04/FL-Bar-Ethics-Op-76-2-1.pdf

Original opinion text

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

FLORIDA BAR ETHICS OPINION
OPINION 76-2
February 28, 1977
Advisory ethics opinions are not binding.
An attorney employed by an insurance company may not ethically represent both a minor claimant and the insurer in a "friendly suit" to gain court approval of a settlement between the two parties. An attorney employed by and representing an insurance company may not ethically represent in probate proceedings a personal representative seeking court approval of a wrongful death settlement between the insurer and the personal representative.
CPR: EC 5-1, DR 5-105(A), 5-107(B)
Chairman Sullivan stated the opinion of the committee:
This inquiry involves two different situations in which an insurance company agrees to settle a claim which requires court approval.

1. An insurance company agrees to settle a minor's claim. Because the settlement requires court approval, a "friendly suit" is commenced. We are asked whether the lawyer who represents and is paid by the insurance company and who is in court to obtain court approval of the agreed-upon settlement may ethically present the claimant's position to the court either by pleadings which that lawyer prepares or in person.
2. An insurance company agrees with the widow and personal representative of a decedent to settle a wrongful death claim. That claim is the only asset of the estate, and the proposed settlement requires court approval. We are asked whether the lawyer who represents and is paid by the insurance company may ethically represent the personal representative of the estate and prepare the papers necessary to open the estate and a petition seeking court approval of the settlement which states that the settlement is in the best interest of the estate.
   The Committee, one member dissenting, answers "No" to the first question and "No" to the second.
   The interest of the claimant, whether a minor or the personal representative of an estate, is to secure the highest possible settlement in terms of dollars. The insurance company's interest is in paying as little as possible.
   In those situations, the lawyer for the insurance company, whether he becomes involved initially or after the settlement has been agreed upon, is employed to seek judicial approval of that settlement. For the lawyer to represent both the claimant and the insurance company in that situation would violate DR 5-105(A) and EC 5-1 and place him in a compromising position as to DR 5-107(B).
   We recognize that not infrequently the claimant is not represented by a lawyer during the settlement negotiations with the insurance company. While no one can force a legally competent claimant to seek advice from a lawyer, the CPR does prevent the insurance company's lawyer from filling that need.
   One Committeeman believes that it is not important who prepares the papers seeking court approval, but that if the lawyer for the insurance company does prepare the papers, it is essential for him to advise the court that he is not representing the claimant so that the court can then take any additional steps it feels are necessary to protect the interests of any minors or incompetents affected by the settlement.