WISBAR 1992

Can one lawyer represent both an injured plaintiff and the plaintiff's subrogated health insurer in the same personal injury claim?

Short answer: The opinion concluded that joint representation may be possible, but only with care, because there are clear potential conflicts. The plaintiff and the subrogated carrier share the goal of recovering from the tortfeasor, but they conflict over how to divide any settlement or judgment, and an irreconcilable conflict exists if the recoverable funds are insufficient to make both whole, especially given Wisconsin's made-whole rule from Rimes. The committee required a clear written allocation agreement fixing fees and decision-making before joint representation begins, written informed consent from each client, and recognized that an unanticipated conflict ordinarily forces the lawyer to withdraw from representing at least one and probably both clients under SCR 20:1.7 and 20:1.16(a)(1).

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This page answers the general question as of 1992. Ezel answers yours: whether it's allowed on your facts, under the current rules of professional conduct in your state, with citations.

Disclaimer: Advisory only. Not binding precedent.

About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official ethics opinion. The original opinion (linked on this page as a PDF) is the authoritative source for any reliance.

View original ethics opinion (PDF)

Plain-English summary

Opinion E-92-1 (1992) addressed whether, and under what circumstances, a lawyer pursuing a personal injury case for a plaintiff may also represent the plaintiff's medical and hospitalization insurer in pursuing a subrogation claim against the same tortfeasor. The committee began with the basic conflict rule, SCR 20:1.7, requiring the lawyer to determine whether a conflict exists, whether the representation of one client would materially limit the other, and, if the lawyer concludes the representation will not be adversely affected, to obtain each client's written consent after a consultation explaining the risks and advantages of common representation.

The committee identified two distinct areas of conflict. First, representing both claimants against a common defendant carries the conflict potential inherent in any multiple-party representation. Second, dividing how much of a settlement or judgment each party receives is, by necessity, a conflict; appeals can also divide the parties. The committee flagged settlement scenarios (a lump-sum offer, a defense suggestion that the injured party accept less, a carrier insisting on being made whole) and concluded that an irreconcilable conflict exists, making joint representation impermissible under SCR 20:1.7, when the collectible funds are insufficient to make both the injured party and the carrier whole. It noted Wisconsin's made-whole rule from Rimes v. State Farm, under which a subrogated carrier is not paid until the insured is made whole, and the opposite ERISA result, which can be hard to know early in the case.

Absent such delimiting circumstances, the committee concluded joint representation may be possible because the plaintiff and carrier are not necessarily adverse at trial (citing ABA Formal Opinion 282). But because the allocation conflict always affects strategy and settlement, the committee said it is critical to have a clear written agreement allocating proceeds and fixing fee arrangements before joint representation begins, specifying who controls the case and settlement decisions. It cautioned that representing the parties in reaching that allocation under the former intermediary rule, SCR 20:2.2, would preclude the lawyer from representing either side in a later dispute over the allocation and would strip privilege from those discussions, and that learning information adverse to one client would require withdrawal from representing either party under SCR 20:1.16(a)(1). The lawyer must obtain each client's written consent, address fees (in writing if contingent) and the sharing of expenses under SCR 20:1.7(b)(2) and 20:1.5(c), and plan in the consent letters for what happens if an unanticipated conflict develops.

Currency note

This opinion was issued in 1992, before Wisconsin's July 1, 2007 adoption of the revised Rules of Professional Conduct (the state's Ethics 2000 update). The opinion relies in part on SCR 20:2.2 (the lawyer-as-intermediary rule), which has since been removed from the Wisconsin and Model Rules, and the conflict rules (SCR 20:1.7) have been revised. 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 same lawyer represent both the injured plaintiff and the subrogated insurer?

A: Sometimes. The committee concluded joint representation may be possible with adequate precautions, because the two are not necessarily adverse at trial, but the allocation of any recovery is an inherent conflict that must be managed.

Q: When is joint representation flatly prohibited?

A: When the money cannot make everyone whole. The committee concluded that if the collectible funds are insufficient to make both the injured party and the carrier whole, an irreconcilable conflict exists and joint representation would violate SCR 20:1.7.

Q: What has to be in place before taking on both clients?

A: The committee concluded the lawyer needs a clear written allocation agreement (fixing proceeds, fees, and who controls settlement), entered before the joint representation begins, plus each client's written informed consent.

Q: What if a conflict develops later?

A: The committee concluded an unanticipated conflict ordinarily requires the lawyer to stop representing at least one and probably both clients, citing SCR 20:1.7(a) and 20:1.16(a)(1).

Background and rules framework

The opinion applies SCR 20:1.7 / Model Rule 1.7 (concurrent conflicts of interest), with SCR 20:1.5(c) / Model Rule 1.5(c) (contingent-fee writing), SCR 20:1.2 and 20:1.4 / Model Rules 1.2 and 1.4 (scope and communication), the former SCR 20:2.2 (lawyer as intermediary), and SCR 20:1.16(a)(1) / Model Rule 1.16 (mandatory withdrawal). It situates the conflict against Wisconsin's made-whole subrogation rule and the contrasting ERISA rule.

Citations and references

Rules of Professional Conduct:

Wis. SCR 20:1.7, 20:1.7(a), 20:1.7(b)(2) / Model Rule 1.7 (conflicts of interest)
Wis. SCR 20:1.5(c) / Model Rule 1.5(c) (contingent fees in writing)
Wis. SCR 20:1.2, 20:1.4 / Model Rules 1.2, 1.4 (scope; communication)
Wis. SCR 20:2.2 (lawyer as intermediary; later removed)
Wis. SCR 20:1.16(a)(1) / Model Rule 1.16 (mandatory withdrawal)

Cases:

Rimes v. State Farm Mutual Automobile Insurance Co., 106 Wis. 2d 263, 316 N.W.2d 348 (1982) (made-whole rule for subrogation)
Frantz Tractor Co. v. Providence Washington Insurance Co., 119 A.2d 495 (Pa. 1956); Travelers Indemnity Co. v. Ingebretsen, 38 Cal. App. 3d 358, 113 Cal. Rptr. 679 (1974)

Other opinions cited:

ABA Formal Op. 282 (1950) (representing claimant and 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-92-1.pdf

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