If a personal-injury client dies during the representation, must the lawyer tell the tortfeasor's insurer before continuing to negotiate the claim?

Plain-English summary

A lawyer handled a slip-and-fall claim of questionable liability. After the client was treated for his injuries but during the representation, the client died of AIDS. The lawyer kept handling the matter without telling the tortfeasor's insurer of the death, believing disclosure would undermine the case and at the request of at least one heir. No suit was filed and no defense counsel was involved. The lawyer negotiated a settlement and received two checks, one under medical-payments coverage and one under liability coverage, both made jointly to the lawyer and the deceased client. The adjuster never asked whether the client was alive, and the lawyer never made any representation about the client's condition. The inquiry asked whether the lawyer could arrange an administrator and deposit the checks pending a decision, whether disclosure of the death was required, when it had to be made, and whether the answers changed for the medical-payments check, where the insurer was represented, or where the client was a minor.

The opinion held the lawyer could not first arrange an administrator and deposit the checks, and that disclosure of the death was required. It reasoned under Rule 7.2(a)(4), which prohibits a lawyer from making a false statement of law or fact in representing a client, that in personal-injury practice all communications with insurer officials are directed toward the contractual resolution of the client's claim through a release. When the client dies, the lawyer no longer has a client, and a client exists again only when the deceased client's personal representative retains the lawyer; the client's identity must be disclosed to the insurer. The opinion concluded the lawyer may not negotiate with insurer officials while having no client, and that failing to disclose the client's identity or negotiating without a client communicates a false statement of fact. Disclosure must be made before continuing negotiations. The same analysis applied to each check, regardless of whether the death could affect the medical-payments claim, regardless of whether the insurer was represented by counsel, and regardless of whether the client was a minor.

Currency note

This opinion was issued in 1994, before the North Carolina State Bar's adoption of the 2003 revisions to the Rules of Professional Conduct. 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, deadline, or requirement mentioned here.

Common questions

Q: Must a lawyer tell the insurer when a personal-injury client dies?

A: Yes. The opinion concluded the lawyer must disclose the client's death to the tortfeasor's insurer, because continuing to negotiate without disclosing it communicates a false statement of fact under Rule 7.2(a)(4).

Q: When must the disclosure be made?

A: Before continuing negotiations. The opinion held the lawyer must disclose the death to the insurer before continuing to negotiate the claim.

Q: Why is silence treated as a false statement here?

A: Because the death ends the representation. The opinion reasoned that once the client dies the lawyer has no client, and negotiating a contractual settlement while having no client, or failing to disclose the client's identity, communicates a false statement of fact.

Q: Does it matter that the death could not affect the medical-payments claim, or that the client was a minor?

A: No. The opinion applied the same analysis to each check and held the result does not change where the insurer is represented by counsel or where the client was a minor.

Background and rules framework

The opinion applied North Carolina's then-current Rule 7.2(a)(4), corresponding to Model Rule 4.1, which bars a lawyer from making a false statement of material fact in representing a client. It treated the personal-injury negotiation as a contractual process culminating in a release, and reasoned that the client's death both ended the representation and made continued negotiation, absent disclosure, a false statement of fact.

Citations and references

Rules of Professional Conduct:

• MR 4.1 (truthfulness in statements to others)
• North Carolina Rule 7.2(a)(4)

See also

• NC Ethics Op. RPC 203: a client's stated intent to commit perjury
• NC Ethics Op. RPC 196: recovering legal fees from the opposing party

Source

• Landing page: https://www.ncbar.gov/for-lawyers/ethics-and-governing-rules/ethics-opinions/opinions/rpc-182/

Original opinion text

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

Inquiry #1:

Attorney is retained by Client to handle a slip-and-fall personal injury case of questionable liability. During the course of representation, but after Client has been treated by his doctor for injuries caused by the fall, Client dies of AIDS. Attorney continues handling the matter without informing the tortfeasor's insurance company of Client's death. Attorney's decision not to disclose the death to the insurance company is based on Attorney's belief that to do so would undermine Client's case. In addition, at least one of Client's heirs requested that Attorney not disclose the death of Client to the insurance company adjuster.

No lawsuit is ever filed, and no defense counsel is involved. Attorney negotiates a settlement with the insurance company and receives two settlement checks, both made out jointly to Attorney and the deceased Client. One check is issued under the insurance carrier's medical payments coverage, and the other under its liability coverage. At no point during the course of Attorney's representation did the insurance adjuster question whether Client was still alive or inquire about Client's current condition. Attorney never made any representations to the adjuster as to Client's current condition.

May Attorney arrange for the appointment of an administrator and have the settlement checks endorsed and deposited into Attorney's trust account, pending a decision on Inquiry #2?

Opinion #1:

No.

Inquiry #2:

Is Attorney required to disclose Client's death to the tortfeasor's insurance company?

Opinion #2:

Yes. Rule 7.2(a)(4) prohibits a lawyer from making a false statement of law or fact in the representation of a client. In the personal injury practice area, all lawyer communications with insurance company officials are directed toward the contractual resolution of a client's claim, with the client being a party to a contract, a Release. If the client dies, the lawyer no longer has a client. Only when the lawyer is subsequently retained by the deceased client's personal representative does the lawyer have a client. The identity of the client must be disclosed to the insurance company officials. The lawyer may not negotiate with insurance company officials when the lawyer has no client. To fail to disclose the identity of the client or to negotiate without a client would be to communicate a false statement of fact.

Inquiry #3:

If the answer to Inquiry #2 is "yes," when must the disclosure be made?

Opinion #3:

The lawyer must disclose the death of the client to the insurance company before continuing negotiations.

Inquiry #4:

Do the same ethical issues apply to each check, in light of the fact that Client's death from AIDS could never impact settlement of the medical payments claim?

Opinion #4:

Yes. See Opinion #2 above.

Inquiry #5:

Would it make any difference if the tortfeasor or the tortfeasor's insurance company was represented by legal counsel?

Opinion #5:

No.

Inquiry #6:

Would it make any difference if Client was a minor?

Opinion #6:

No.