Can the lawyer who defended a workers' compensation case later defend a third-party damage suit by the same injured plaintiff over the same accident?

Plain-English summary

The inquiry described Attorney A of firm A, B & C, who defended a Workmen's Compensation case for insurance company I; the plaintiff P's deposition was taken and the case was settled or finally adjudicated. Plaintiff P then brought a third-party damage action against defendant D arising from the same accident. The question was whether Attorney A or any member of his firm could then represent defendant D in the damage suit.

The Committee drew the line at subrogation. If company I paid any compensation or medical benefits to the plaintiff, it has subrogation rights that would be involved in the damage suit, and in that case Attorney A and all members of his firm would be disqualified under Canon 6 from defending the damage suit because of the conflict of interest with the insurance company. The Committee cited Opinion 299 as the exact converse of this situation and compared Opinions 313 and 317.

If, however, the insurance company paid no benefits and has no subrogation rights, there is no conflict of interest, and Attorney A or any member of his firm may ethically defend the damage suit. The Committee noted that at no stage had there been any confidential relationship with the plaintiff P that would preclude the firm's employment. The vote was 8-0.

Currency note

This opinion was issued in 1966, 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. Treat this page as historical context, not current guidance.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 the comp-defense lawyer later defend the damage suit from the same accident?

A: The Committee said it depends on subrogation. If the carrier paid benefits and holds subrogation rights at stake in the damage suit, the lawyer and his firm are disqualified under Canon 6; if not, they may defend.

Q: Why does subrogation control the conflict analysis?

A: Because the carrier's subrogation interest would be involved in the damage suit, creating a conflict between the lawyer's former client (the carrier) and the new defense; absent subrogation, no such conflict exists.

Q: Did the plaintiff's deposition create a barrier to the firm's later work?

A: No. The Committee said at no stage had there been any confidential relationship with the plaintiff that would preclude the firm's employment.

Background and rules framework

The opinion interprets former Texas Canon 6 (conflicts of interest), turning on whether the compensation carrier's subrogation interest is at stake in the later damage suit. The modern analogs are ABA Model Rule 1.7 (concurrent conflicts) and Model Rule 1.9 (duties to former clients).

Citations and references

Rules of Professional Conduct:

• MR 1.7 (conflicts of interest), as the modern analog
• MR 1.9 (duties to former clients), as the modern analog
• Texas Canon 6 (former canon)

Other opinions cited:

• Texas Opinion 299 (May 1965) (the exact converse situation); Opinions 313 and 317 (January 1966)

See also

• TX Ethics Op. 359: Firm Representing a Savings and Loan and Its Title Insurer
• TX Ethics Op. 343: Corporate Counsel Rendering Services for Related Companies
• TX Ethics Op. 367: Former Prosecutor Joining a Defense Firm

Source

• Landing page: https://www.legalethicstexas.com/resources/opinions/opinion-326/
• Original PDF: https://tcle-web.s3.amazonaws.com/public/documents/Opinion_326.pdf

Original opinion text

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

QUESTION PRESENTED

Attorney A of the law firm A, B & C defends a Workmen's Compensation case for insurance company I. Deposition of the plaintiff P is taken and the case is either settled or disposed of by a final judgment. Plaintiff P then brings a third-party action against defendant D by reason of the same accident. May attorney A or any member of his firm then represent the defendant D in the damage suit?

23 Baylor L. Rev. 855 (1972)

CONFLICT OF INTEREST - DEFENSE OF DAMAGE SUIT AFTER DEFENSE OF WORKMEN'S COMPENSATION SUIT ARISING OUT OF SAME ACCIDENT
An attorney who defends a Workmen's Compensation case may not thereafter defend a damage suit by the same plaintiff for the same accident if the subrogation claim of the Workmen's Compensation carrier is involved.

Canon 6.

If the insurance company I paid any Workmen's Compensation or medical benefits to the plaintiff in the Compensation case it of course has subrogation rights which would be involved in the damage suit and in that case it is clear that Attorney A and all members of his firm would be disqualified under Canon 6 from defending the damage suit by reason of the conflict of interest with the insurance company. See Opinion 299 (May, 1965), which is the exact converse of the present situation, and compare Opinions 313 and 317 (January, 1966).

If, however, the insurance company paid no benefits in the Workmen's Compensation case and has no subrogation rights there is no conflict of interest and Attorney A or any member of his firm may ethically defend the damage suit. At no stage has there been any confidential relationship with the plaintiff P which would preclude the employment of A or any member of his firm. (8-0.)

Tex. Comm. On Professional Ethics, Op. 326 (1966)