Can an insurance company's lawyer set up and handle a friendly suit to settle a minor's injury claim against the insurer when the claimant has no lawyer?

Plain-English summary

The inquiry came from a lawyer asked by an insurance company to handle a friendly suit to dispose of a minor's personal-injury claims, where neither the minor nor his father had consulted a lawyer. The lawyer asked whether he could arrange representation for the minor and next friend, or whether he could do no more than tell the father he needed a lawyer and acquiesce in his selection.

The committee found that no canon of the Texas Bar or the ABA directly covered the question, provided Texas Canons 6 and 32 (ABA Canons 6 and 35) were not violated. It then set out the path it considered proper: the insurer's lawyer should studiously avoid any contact with the minor and his parents; should require the adjuster to make all the arrangements; may prepare the necessary papers and turn them over to the adjuster for submission to the claimants; and may suggest the names of two or three attorneys, provided the adjuster carefully explains to the claimants that they will need their own lawyer, gives them the chance to make their own selection, and makes no recommendation unless the claimants ask. The vote was 6-3.

Currency note

This opinion was issued in 1949, under the former Texas Canons of Ethics, which the Texas Disciplinary Rules of Professional Conduct replaced effective January 1, 1990. Subsequent rule amendments or later opinions may have changed the analysis; conflicts of this kind are now addressed by ABA Model Rule 1.7 (concurrent conflicts), and a lawyer's dealings with an unrepresented person by Model Rule 4.3. Treat this page as historical context, not current guidance.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 the insurer's lawyer represent both the company and the claimants in the friendly suit?

A: No. The committee held the insurer's lawyer may not act as attorney for the claimants in a friendly suit against the company.

Q: What was the lawyer allowed to do?

A: He could prepare the necessary papers and turn them over to the adjuster, while avoiding any contact with the minor and parents. He could suggest a few attorneys' names only if the adjuster explained the claimants needed their own lawyer and let them choose, with no recommendation unless requested.

Q: Why did the committee route everything through the adjuster?

A: To keep the insurer's lawyer from dealing directly with the unrepresented claimants and to leave the selection of counsel to them, so the conflict between the company's interests and the claimants' interests was not compromised.

Background and rules framework

The opinion interprets former Texas Canons 6 and 32 (conflicting interests and intermediaries) and ABA Canons 6 and 35, applied to a lawyer who represents an insurer and is asked to facilitate a settlement with an unrepresented minor claimant. The modern analogs are ABA Model Rule 1.7 (concurrent conflicts of interest) and Model Rule 4.3 (dealing with an unrepresented person).

Citations and references

Rules of Professional Conduct:

• MR 1.7 (concurrent conflicts of interest), as the modern analog
• MR 4.3 (dealing with an unrepresented person), as the modern analog
• Texas Canons 6 and 32, ABA Canons 6 and 35

See also

• TX Ethics Op. 34: Hidden Insurance Solicitation to the Opposing Party
• TX Ethics Op. 23: County Attorney's Partner Defending Criminal Cases

Source

• Landing page: https://www.legalethicstexas.com/resources/opinions/opinion-21/
• Original PDF: https://tcle-web.s3.amazonaws.com/public/documents/Opinion_21.pdf

Original opinion text

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

QUESTION PRESENTED

What should an attorney do when he is asked by an insurance company to handle a friendly suit in order to effectively dispose of a minor's claims for personal injuries, when neither the minor nor his father has consulted an attorney? In other words, can you in such case arrange with an attorney to represent the minor and his next friend, or can you properly do no more than to communicate with the minor and his father and instruct him that he will have to have an attorney, ask him to select an attorney, and acquiesce in his selection, running the risk of the attorney advising against the settlement or charge for his services a substantial part of the amount of the agreed settlement? If one of these agreements for settlement should get out of hand the insurance company will hold you responsible and you lose a client.

18 Baylor L. Rev. 205 (1966)

CONFLICTING INTEREST - EMPLOYMENT - INTERMEDIARIES
An attorney for an insurance company may not act as attorney for claimants in a friendly suit by the claimants against the company. He may prepare the necessary papers for the adjustor. He may suggest names of attorneys to represent claimants, provided he advises the adjustor to explain to the claimants that they will need an attorney, allow them to make their own selection, and make no recommendation unless the claimants request.

Canons 6, 32. A.B.A. Canons 6, 35.

The committee is of the opinion that no canon, either of this Bar, or of the American Bar Association, directly pertain to, or covers, the foregoing question, in the event Texas Canons 6 and 32 (A.B.A. Canons 6 and 35) are not violated. We are of the opinion that the attorney for the insurance company (1) should studiously avoid having any contact with the minor and his parents, (2) should require the adjuster to make all the necessary arrangements, (3) may prepare the necessary papers and turn them over to the adjuster for submission to the minor and his parents, (4) may suggest the names of two or three attorneys who may be approached in regard to representing the plaintiffs, advising the adjuster, however, that he should carefully explain to the claimants that they will need the services of an attorney and give them the opportunity of making their own selection, and make no recommendation unless requested to do so by the claimants. (6-3)

Tex. Comm. On Professional Ethics, Op. 21 (1949)