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NYC-BAR 2005

When an insurance company is a party and represented by counsel, can the opposing lawyer talk directly to its claims adjuster about settlement?

Short answer: No, not without the actual prior consent of the insurer's lawyer. DR 7-104(A)(1) bars the contact even when the adjuster initiates it, even though the adjuster is sophisticated, and even to speed settlement. Consent cannot be inferred from circumstances or the adjuster's say-so; it must come from opposing counsel.

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This page answers the general question as of 2005. Ezel answers yours: whether it's allowed on your facts, under the current New York Rules of Professional Conduct, with citations.

Currency note: this opinion is from 2005
Subsequent statutory amendments, court decisions, or later opinions or rule amendments may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.
Disclaimer: Advisory only. Not binding precedent.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official ethics opinion. The original opinion (linked on this page) is the authoritative source for any reliance.

Plain-English summary

The opinion addresses a common practice: a law firm represents medical providers in disputes with insurers over unpaid bills, and although the insurer appears through a lawyer, a non-lawyer claims adjuster frequently calls plaintiff's counsel directly to discuss settlement, without the express consent of the insurer's lawyer. The committee, applying the former New York Code, asks whether the no-contact rule, DR 7-104(A)(1), reaches these calls, and whether the lawyer may rely on the adjuster's assurance that counsel consents.

The committee concludes the rule applies. DR 7-104(A)(1) bars communicating, on the subject of the representation, with a party the lawyer knows is represented by counsel, absent the prior consent of that counsel. The committee finds each element met: the discussions concern the subject of the representation, the adjuster represents a represented party, and a communication is covered regardless of who initiates it. Neither the adjuster's sophistication, nor the settlement-facilitating purpose, nor an industry practice of routine adjuster contact excuses compliance.

On consent, the committee concludes that the insurer's counsel must actually consent, and that consent cannot be implied from the circumstances or inferred from the adjuster's own assurance. In the opinion's words, the "safest course is to obtain that consent orally or in writing from counsel"; a lawyer who instead relies on the client's or adjuster's say-so risks violating the rule if counsel did not in fact consent. The committee notes an insurer that wants to allow direct adjuster contact can simply instruct its lawyer to give the adjuster a consent letter, and that even with consent, the lawyer may not engage in dishonesty or seek information the adjuster must keep confidential.

In practice

The opinion was issued in 2005 under the former New York Code, which the New York Rules of Professional Conduct replaced effective April 1, 2009; DR 7-104(A)(1) corresponds to current Rule 4.2. Under the framework as it stood at the time, the opinion holds that before discussing a represented insurer's case with its claims adjuster, counsel should obtain the actual consent of the insurer's lawyer, conveyed orally or in writing, rather than relying on the adjuster's assurance or inferring consent from a settlement-oriented call. It notes the opinion does not reach situations where the insurer is not itself a party, citing N.Y. State 785.

Common questions

Q: Can a plaintiff's lawyer talk settlement directly with a represented insurer's claims adjuster?

A: Not without the prior consent of the insurer's lawyer. The opinion concludes DR 7-104(A)(1) bars the contact absent that consent.

Q: Does it matter that the adjuster called the lawyer, not the other way around?

A: No. The opinion concludes a communication is covered regardless of who initiates it, so an adjuster-initiated call does not remove the consent requirement.

Q: Can the lawyer rely on the adjuster's statement that the insurer's counsel consents?

A: No. The opinion concludes consent must come from opposing counsel and cannot be inferred; relying on the adjuster's word risks a violation if counsel did not in fact consent.

Q: How can an insurer permit direct adjuster contact?

A: The opinion notes the insurer can instruct its lawyer to give the adjuster a letter granting consent to such contact.

Background and rules framework

The opinion interprets the former New York Code's no-contact rule, DR 7-104(A)(1) (no communication with a represented party absent counsel's prior consent), which corresponds to Model Rule 4.2, and DR 1-102(A)(4) (no dishonesty or misrepresentation), corresponding to Model Rule 8.4(c). It grounds the rule's purposes in Niesig v. Team I and ABA Formal Op. 95-396, and contrasts the situation where the insurer is not a party, citing N.Y. State 785.

Citations and references

Rules of Professional Conduct:

  • MR 4.2 / NY DR 7-104(A)(1) (communication with a represented party)
  • MR 8.4(c) / NY DR 1-102(A)(4) (dishonesty or misrepresentation)

Cases:

  • Niesig v. Team I, 76 N.Y.2d 363 (1990), purposes of the no-contact rule
  • In re Illuzzi, 616 A.2d 233 (Vt. 1992), industry practice does not excuse direct insurer contact

Other opinions cited:

  • ABA Formal Op. 95-396; ABCNY Formal Op. 2002-1; N.Y. State 785 (2005) (adjuster contact where insurer is not a party)

See also

Source

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