Can a lawyer hired by an insurer represent both the insurer and the insured in an auto-accident case where the plaintiff also seeks punitive damages?
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This page answers the general question as of 1984. Ezel answers yours: whether it's allowed on your facts, under the current rules of professional conduct in your state, with citations.
Plain-English summary
Opinion E-84-19 asked whether a lawyer retained by an insurance carrier may simultaneously represent the carrier and an insured defendant in a bodily-injury auto case in which the plaintiff asserts a claim for punitive damages.
The committee concluded that a lawyer retained by an insurer may generally represent both the insurer and the insured (former SCR 20.23(3)(d), 20.28(3)). When doing so, the lawyer must fully disclose to the insured the lawyer's relationship to the insurer (ABA Informal Opinion 1402). Although a community of interest exists between insurer and insured, often making them virtually one in their common interest (ABA Formal Opinion 282), the lawyer's primary duty is to the named insured. The lawyer should remain sensitive to any divergence of interests and always act so the insured has no basis to believe the insured's interests are not fully and fairly represented.
The committee added that whether the lawyer can fairly and adequately protect both interests depends on a case-by-case analysis (SCR 20.23(3)(d)); in some situations there is little chance the lawyer's judgment will be adversely affected, while in others the chance is not unlikely. Finally, it noted that the Ninth Circuit had held in Zieman Mfg. Co. v. St. Paul Fire & Marine Ins. Co. that the mere presence of a punitive-damages claim against an insured does not create, as a matter of law, a conflict of interest between the insured and the insurer.
Currency note
This opinion was issued in 1984, before Wisconsin's July 1, 2007 adoption of the revised Rules of Professional Conduct for Attorneys (the state's Ethics 2000 update), and it analyzes conduct under the former Code. Concurrent conflicts, including insurer/insured representation, are now governed by SCR 20:1.7 / Model Rule 1.7. 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 Treat this page as historical context, not current guidance.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 one lawyer represent both the insurer and the insured?
A: The committee concluded generally yes, provided the lawyer fully discloses the relationship to the insured and treats the named insured as owed the primary duty.
Q: Does a punitive-damages claim automatically create a conflict?
A: The committee concluded no; citing the Ninth Circuit, it stated the mere presence of a punitive-damages claim does not create a conflict between insured and insurer as a matter of law.
Q: What must the lawyer watch for?
A: The committee stated the lawyer must remain sensitive to any divergence of interests and act so the insured has no basis to believe the insured's interests are not fully and fairly represented.
Background and rules framework
The opinion interpreted the former Code's multiple-representation provisions (SCR 20.23(3)(d), 20.28(3)) in the insurer/insured setting, emphasizing disclosure, the primacy of the insured's interest, and a case-by-case conflicts analysis. Concurrent conflicts are now governed by SCR 20:1.7 / Model Rule 1.7.
Citations and references
Rules of Professional Conduct:
- Wis. SCR 20.23(3)(d), 20.28(3) / Model Rule 1.7 (concurrent conflicts of interest) (former Code provisions)
Cases:
- Zieman Mfg. Co. v. St. Paul Fire & Marine Ins. Co., 724 F.2d 1343 (9th Cir. 1983)
Other opinions cited:
- ABA Formal Opinion 282 (May 1950); ABA Informal Opinions 1402 (1977), 1370 (1976)
- Michigan State Bar Opinions CI-876, 866
See also
- WI Ethics Op. E-85-3: Multiple Representation in Medical Malpractice Actions
- WI Ethics Op. E-99-1: Representing Both Insurers and Insureds
- WI Ethics Op. E-92-1: Representing a Plaintiff and the Subrogated Insurer
Source
- Landing page: https://www.wisbar.org/formembers/ethics/pages/formal-opinions.aspx
- Original PDF: https://www.wisbar.org/formembers/ethics/Ethics%20Opinions/E-84-19.pdf
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