Can one lawyer represent both an injured claimant and the workers' comp carrier's subrogation claim against the same third party?

Plain-English summary

The opinion (rendered June 2, 1977, and amended April 6, 2013) addressed whether a lawyer representing a claimant against a third-party defendant may also represent the Workmen's Compensation Insurance Carrier (or self-insurer) against the same third-party defendant in a personal injury case. It quoted a 1950 ABA Committee on Professional Ethics formal opinion stating that an attorney employed by an insurer to prosecute its subrogation claim may simultaneously prosecute the insured's claim for the amount not recoverable under insurance, if the attorney is retained and compensated directly by the insured.

The opinion applied MRPC 1.7(a), under which a lawyer shall not represent a client if the representation will be directly adverse to another client unless the lawyer reasonably believes the representation will not adversely affect the relationship and each client gives knowing and informed consent after consultation. It stressed that the lawyer must weigh carefully the possibility that judgment may be impaired or loyalty divided when representing multiple clients with potentially differing interests, resolving doubts against the representation, and must withdraw from both if the interests become actually differing. It also noted the rule against an aggregate settlement of multiple clients' claims absent each client's consent after disclosure of all the claims, the total amount, and each person's participation.

The opinion concluded that a lawyer may represent both the claimant and the insurance carrier (or self-insurer) holding a subrogation right through the claimant, against a third-party defendant, provided the lawyer does so on a fee arrangement made separately with each client and provided the dual representation is disclosed to both. If a conflict develops during the representation, the lawyer must withdraw from representing both clients.

In practice

Under this opinion, a Mississippi lawyer may handle both the injured worker's third-party claim and the comp carrier's subrogation claim against the same defendant, but the opinion conditions that on separate fee arrangements with each client and disclosure of the joint representation to both. The opinion holds that if the two clients' interests become actually adverse, the lawyer must withdraw from both, and that any aggregate settlement requires each client's informed consent.

Common questions

Q: Can one lawyer represent both the claimant and the workers' comp carrier against the same third party?

A: Yes, conditionally. The opinion concluded the lawyer may do so if retained and compensated separately by each client and if the dual representation is disclosed to both.

Q: What happens if a conflict develops between the claimant and the carrier?

A: Per the opinion, if the interests become actually differing, the lawyer must withdraw from representing both clients.

Q: Does an aggregate settlement require anything special?

A: The opinion noted that a lawyer must not make an aggregate settlement of multiple clients' claims unless each client consents after being advised of all the claims, the total amount, and each person's participation.

Background and rules framework

The opinion interprets MRPC 1.7 (conflict of interest; direct adversity and informed consent), corresponding to Model Rule 1.7, and references the no-aggregate-settlement principle now in Model Rule 1.8(g). It also relies on a 1950 ABA Committee on Professional Ethics formal opinion permitting joint representation of insured and insurer subrogation claims with separate retention.

Citations and references

Rules of Professional Conduct (Mississippi; cf. Model Rules):

• MRPC 1.7 (conflict of interest) (cf. Model Rule 1.7)

Other opinions cited:

• ABA Committee on Professional Ethics formal opinion (May 27, 1950): joint prosecution of an insurer's subrogation claim and the insured's uninsured claim with separate retention.

See also

• Mississippi Ethics Op. 28: Conflict of Interest - Multiple Representation
• Hawaii Ethics Op. 36: Insurer Outside-Auditor Disclosure

Source

• Landing page: https://www.msbar.org/ethics-discipline/ethics-opinions/formal-opinions/43/
• Original PDF: https://www.msbar.org/media/1078/et_op_43-amended.pdf

Original opinion text

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

ETHICS OPINION NO. 43

OF THE MISSISSIPPI BAR

RENDERED June 02, 1977

AMENDED April 06, 2013

CONFLICT OF INTEREST - A lawyer who is employed by a Claimant against a third party may simultaneously prosecute the interest of the insurance carrier (or Self-Insurer) against said third party if the lawyer is retained and compensated directly by each party.

The Ethics Committee of the Mississippi Bar has been requested to render an opinion on the propriety of a lawyer who is representing a Claimant against a third party defendant to also represent the interest of the Workmen's Compensation Insurance Carrier (or Self-Insurer) against the same third party defendant in a personal injury case.

The Committee on Professional Ethics of the American Bar Association, in a Formal Opinion written May 27, 1950, stated:

An attorney who is employed by an insurance company to prosecute the company's subrogation claim against a third party may simultaneously prosecute the insured's claim for the amount not recoverable under his insurance if the attorney is retained and compensated directly by the insured.

Rule 1.7(a) of the Mississippi Rules of Professional Conduct (MRPC), provides that

a lawyers shall not represent a client if the representation of that client will be directly adverse to another client, unless the lawyer reasonably believes:

(1) the representation will not adversely affect the relationship with the other client; and

(2) each client has given knowing and informed consent after consultation. The consultation shall include explanation of the implications of the adverse representation and the advantages and risks involved.

The lawyer is charged with the duty of weighing carefully the possibility that his judgment may be impaired or his loyalty divided if he accepts or continues employment of multiple clients having potentially differing interests. He should resolve all doubts against the propriety of the representation. If a lawyer accepted such employment and the interests did become actually differing, he would have to withdraw from employment of both clients.

A lawyer who represents two or more clients must not make or participate in the making of an aggregate settlement of the claims of or against his clients, unless each client has consented to the settlement after being advised of the existence and nature of all the claims involved in the proposed settlement, of the total amount of the settlement as of the participation of each person in the settlement."

It is the opinion of this committee that a lawyer may represent both a Claimant and an insurance carrier (or Self-Insurer) who has a right of action by way of subrogation through Claimant, against a third party defendant provided the attorney does so on a fee arrangement separately with each client and provided that it is disclosed to both the Claimant and the insurance carrier that the lawyer is representing both parties. If a conflict develops during the representation, the lawyer must withdraw from representation of both clients.