Can a lawyer who is also a defendant, or who is a title insurance agent, represent other defendants in the same mass land-claim suit?

Plain-English summary

The inquiry arose from the Catawba Indians' announced plan to sue roughly 27,500 landowners in three counties for trespass damages since 1840 and return of 144,000 acres. About 70 York County lawyers were available to defend, but most were also potential defendants as landowners, and several were title insurance agents. The questions were whether a lawyer who is a defendant may also act as counsel for other defendants, and whether a lawyer who is a title insurance agent may represent defendants.

On the first question, the committee applied Rule 1.7(b), which bars a representation that may be materially limited by the lawyer's own interest unless the lawyer reasonably believes the representation will not be adversely affected and the client consents after consultation. It acknowledged that defendants on the same side may diverge (for example, on a proposed settlement), creating a possibility that a lawyer-defendant's interests and a client's interests could conflict. But because the defendants' general objectives appeared identical, the committee found nothing making it unreasonable for a lawyer to believe the representation would not be adversely affected by the lawyer's own defendant status, so the representation may proceed under Rule 1.7(b) with full disclosure and consent. The client should be informed of the potential conflict with the lawyer and with other clients, of limits on the attorney-client privilege arising from common-defense multiple representation, and of limits on the lawyer's judgment from coordinating a defense of 27,500 defendants. The committee also stressed that Rule 1.4's duty to keep each client reasonably informed is not waived by large numbers of clients, so the lawyer should arrange to communicate with all clients regularly. On the second question, relying on S.C. Bar Advisory Opinion 92-03 (assuming no lawyer-client relationship between a title agent and the insurer), the committee likewise applied Rule 1.7(b): because the insurer's and landowners' objectives appeared identical at the outset, a lawyer could reasonably conclude the agent duties would not adversely affect the defense, and could proceed with the client's consent. The client should be told of the lawyer's agent role and the chance of a later conflict over a settlement acceptable to one but not the other (though that alone would not normally require withdrawal since the lawyer would not represent the insurer), and that the lawyer's independent judgment on any related title-irregularity claim could be adversely affected. If the lawyer acted as title agent at the closing or failed to recommend title insurance, the lawyer might have to withdraw once a client claim against the lawyer or insurer became apparent, and the client should be aware of that likelihood at the outset. Finally, if the lawyer would be a necessary witness, the lawyer should not act as advocate in that matter (Rule 3.7).

Currency note

This opinion was issued in 1992, before the South Carolina Bar's adoption of the 2005 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: Can a lawyer who is also a defendant represent other defendants in the same case?

A: The committee said yes under Rule 1.7(b), where the defendants' objectives appear identical, if the lawyer reasonably believes the representation will not be adversely affected and each client consents after full disclosure of the potential conflicts.

Q: What must clients be told before consenting?

A: The committee said clients should be informed of the potential conflict with the lawyer and with other clients, of limits on the attorney-client privilege in a common defense, and of limits on the lawyer's judgment from coordinating a very large group defense.

Q: Can a lawyer who is a title insurance agent defend the landowners?

A: The committee said yes under Rule 1.7(b), assuming no lawyer-client relationship with the insurer and identical objectives at the outset, with the client told of the agent role and the possibility of a later settlement conflict, which alone would not normally require withdrawal.

Q: When would the title-agent lawyer have to withdraw?

A: The committee said withdrawal might be required once a client's claim against the lawyer or the insurer became apparent (for example, over an earlier title irregularity), and the lawyer should not act as advocate if he would be a necessary witness under Rule 3.7.

Background and rules framework

The opinion applied Rule 1.7(b) (conflicts arising from the lawyer's own interest), Rule 1.4 (communication), and Rule 3.7 (lawyer as witness), each corresponding to the like-numbered Model Rule. The analysis turned on the defendants' shared objectives and on full disclosure and consent, drawing on S.C. Bar Advisory Opinion 92-03 for the title-agent relationship.

Citations and references

Rules of Professional Conduct:

• South Carolina RPC 1.7(b) / Model Rule 1.7: a lawyer may proceed despite a material-limitation conflict only with reasonable belief of no adverse effect plus client consent after consultation.
• South Carolina RPC 1.4 / Model Rule 1.4: duty to keep each client reasonably informed, not waived by large client numbers.
• South Carolina RPC 3.7 / Model Rule 3.7: a lawyer who would be a necessary witness should not act as advocate.

Other opinions cited:

• SC Bar Advisory Opinion 92-03: whether a lawyer-client relationship exists between a title insurance agent and the insurer is a matter of law (assumed absent here).

See also

• SC Bar Ethics Op. 02-09: A Church Member Suing the Church
• SC Bar Ethics Op. 05-06: When Defense Counsel Becomes a Necessary Witness

Source

• Landing page: https://www.scbar.org/for-lawyers/quicklinks/legal-resources/ethics-advisory-opinions/ethics-advisory-opinion-92-27/

Original opinion text

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

UPON THE REQUEST OF A MEMBER OF THE SOUTH CAROLINA BAR, THE ETHICS ADVISORY COMMITTEE HAS RENDERED THIS OPINION ON THE ETHICAL PROPRIETY OF THE INQUIRER’S CONTEMPLATED CONDUCT. THIS COMMITTEE HAS NO DISCIPLINARY AUTHORITY. LAWYER DISCIPLINE IS ADMINISTERED SOLELY BY THE SOUTH CAROLINA SUPREME COURT THROUGH ITS COMMISSION ON LAWYER CONDUCT.

Ethics Advisory Opinion 92-27

In 1980, the Catawba Indians filed a lawsuit against 83 landowners seeking class action status. That status was denied, and an appeal is pending before the Fourth Circuit Court of Appeals. The Catawbas have announced plans to file an action in federal court against 27,500 landowners in three counties, seeking trespass damages since 1840 and the return of 144,000 acres of land. There are approximately 70 lawyers in York County available to defend these lawsuits. Most of the lawyers are also potential defendants as owners of claimed land. Several of the lawyers also are title insurance agents.

Questions:
1. Can a lawyer who is a defendant in this lawsuit also act as legal counsel for other defendants?
2. Can a lawyer who is the agent of a title insurance company also represent defendants in the proposed action?

Summary:
As long as the interests of the defendants, including the lawyer as a defendant, remain consistent there appears no per se prohibition upon the lawyer representing other defendants, provided that each client consents after consultation.

The lawyer's status as a title insurance agent should not affect the representation unless the lawyer is aware or becomes aware of circumstances relating to the client's earlier purchase of the land that may give rise to an action by the client against the lawyer or against the insurer in a matter in which the lawyer acted as title agent.

Opinion:
1. Rule 1.7(b) generally prohibits a lawyer from undertaking the representation of a client if the representation "may be materially limited" by the lawyer's own interest. Even in such circumstances, however, the lawyer may proceed with the representation if "the lawyer reasonably believes the representation will not be adversely affected" and the client consents after consultation. Id.

In litigation there is the risk that the interests of parties, even on the same side of the litigation, may at some point differ. For example, one defendant in the contemplated action may favor a proposed settlement of the entire action on terms that another defendant would find unacceptable. Thus, there is at least the possibility that the interests of a lawyer-defendant and of the client may at some point conflict.

It is important, however, that the general objectives of the defendants in this litigation appear to be identical. On the facts before us, we find nothing to suggest that it would be unreasonable for a lawyer to believe that the representation of other defendants will be adversely affected by the lawyer's own status as a defendant. Thus, the representation of other defendants may proceed under Rule 1.7(b) if each client is fully informed of the potential conflict and consents after consultation. The client should be informed not only of the potential conflicting interest with the lawyer but also of potential conflicts with other clients; of any limitations upon the attorney-client privilege that may arise from the representation of multiple parties in a common defense; and of any limitations upon the lawyer's exercise of professional judgment that may result from efforts to coordinate the defense of 27,500 defendants.

Given the scope of the proposed lawsuit, we note also the practical implications of communicating with large numbers of clients. A lawyer is required to keep every client "reasonably informed" about the status of a matter under Rule 1.4. This requirement is not waived when there are large numbers of clients. The lawyer, therefore, should make some appropriate arrangements to communicate with all clients regularly, regardless of the number represented.

2. We noted in S.C. Bar Advisory Opinion 92-03 that it is a matter of law as to whether a lawyer-client relationship exists between a title insurance agent and the insurance company. We assumed there as we do here that there is no such relationship. Any potential conflict created by an agent also serving as defense counsel for a landowner, therefore, also is governed by Rule 1.7(b). As in our answer to the first question, it is important that the objectives of both the title insurer and of any landowner appear identical, at least at the outset. Therefore, we again do not believe that it would be unreasonable for a lawyer to conclude that the duties owed by the lawyer as agent of the insurer would not adversely affect the representation of defendant landowners. The lawyer may then proceed with the representation with the consent of the client.

The client should be made aware of the lawyer's role as agent and of the possibility that a conflict might later arise if a settlement offer was acceptable to either the client or the insurer, but not the other. Since the lawyer would not be representing the insurer, however, we do not believe that even that event alone normally would require the lawyer to withdraw as counsel to a landowner.

The client also should be advised that if the client had a related claim arising out of some earlier alleged irregularity in the issuance of title when the land was purchased, the lawyer's independent professional judgment in recommending the pursuit of that claim could be affected adversely.

If the lawyer acted as title agent at the closing or represented the client and failed to recommend the purchase of title insurance, the lawyer might be required to withdraw from representing the client at the time that any claim by the client against the lawyer or insurer became apparent. The client should be aware at the outset of the likelihood of any such withdrawal and of any adverse affect upon the client if it should occur.

If the lawyer would be a necessary witness in a matter the lawyer should not ac as an advocate in that matter (See Rule 3.7).