Could lawyers who represent some of an estate's creditors also represent an outside claimant suing the receiver, when winning that claim would reduce the creditors' recovery?

Plain-English summary

A receiver had been appointed in a case. Attorneys X and Y represented approximately one-third of the acknowledged creditors of the estate. A, who was not an acknowledged creditor, wished to sue the receiver for damages claimed on account of pollution of certain land, and asked whether X and Y could properly represent A in that suit.

The Board concluded the answer turned on the amount of the estate's assets, that is, whether A's successful prosecution would reduce the payment to the creditors X and Y represented. If it would, then representing A would put X and Y in conflicting interests, and they could not represent A without the express consent of their creditor clients. The Board quoted Rule 8: "It is unprofessional to represent conflicting interests, except by express consent of all concerned given after a full disclosure of facts," and its definition that a lawyer represents conflicting interests when, for one client, it is his duty to contend for what duty to another client requires him to oppose. Otherwise, the Board said, there was no express prohibition preventing X and Y's representation of A.

Currency note

This opinion was issued in 1935, decades before Oklahoma replaced its original Rules of Professional Conduct (patterned on the ABA Canons of Professional Ethics) with the Oklahoma Rules of Professional Conduct (adopted 1988) and the later Ethics 2000 revisions. The rule cited here, Rule 8, belongs to that superseded canon-era code, though its conflicting-interests principle persists in the modern conflict rules. 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 Treat this page as historical context, not current guidance.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: Could lawyers for some creditors also sue the receiver on behalf of an outside claimant?

A: The opinion made it conditional. If the outside claimant's success would diminish the represented creditors' recovery, that was a conflict of interest under Rule 8, and the lawyers needed their creditor clients' express consent after full disclosure.

Q: What if the claim would not reduce the creditors' payment?

A: Then, the opinion said, there was no express prohibition preventing the representation; the conflict arose only from competition for a limited fund.

Background and rules framework

The opinion applied Rule 8 of the canon-era Oklahoma Rules of Professional Conduct, barring representation of conflicting interests except by the express consent of all concerned after full disclosure, drawn from the ABA Canons of Professional Ethics. The opinion predates the Model Rules and made no Model Rule citation.

Citations and references

Rules of Professional Conduct:

• Rule 8 (1929 Oklahoma Rules of Professional Conduct): it is unprofessional to represent conflicting interests except by express consent of all concerned after full disclosure.

See also

• Okla. Bar Ethics Op. 81: Counsel for both the estate administrator and a creditor claimant
• Okla. Bar Ethics Op. 73: Will drafter representing a claimant against the will

Source

• Landing page: https://www.okbar.org/ethics/ethics-opinion-no-87/

Original opinion text

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

Adopted October 25, 1935

The Board is in receipt of the following inquiry:

"A receiver has been appointed in a case. X and Y are attorneys who represent approximately one-third of acknowledged creditors of the estate. A, not an acknowledged creditor of the estate, desires to sue the receiver for damages claimed on account of the pollution of certain land. May X and Y properly represent A in the bringing and prosecution of said suit?"

In response:

The proper conclusion depends upon the amount of the assets of the estate– that is, whether or not the successful prosecution of A's claim would result in a diminution of payment to the acknowledged creditors represented by X and Y.

If the successful prosecution of A's claim would result in a diminution of payment to the creditors represented by X and Y, they may not represent A in the prosecution of the claims without the express consent of their clients, as X and Y would thereby represent conflicting interests.

Rule Eight of the Rules of Professional Conduct provides:

"It is unprofessional to represent conflicting interests, except by express consent of all concerned given after a full disclosure of facts. Within the meaning of this canon, a lawyer represents conflicting interests when, in behalf of one client, it is his duty to contend for that which duty to another client requires him to oppose."

Otherwise, there is no express prohibition preventing X and Y's representation of A.