When an insurer hires a lawyer to defend in the name of an uninsured motorist under uninsured-motorist coverage, who is the lawyer's client and what does the lawyer owe the named defendant?

Plain-English summary

An issue arising in litigation prompted counsel for two parties to ask the Committee about the ethical responsibilities of an attorney retained under an insurance policy providing uninsured motorist coverage. Rather than address the specific facts, the Committee set general guidelines. It started from W. Va. Code 33-6-31(d), which lets an insurer that has been served (as though it were a named party defendant) file pleadings and take action in the name of the uninsured or underinsured owner or operator, while preserving that owner or operator's right to employ counsel of his own choice.

The Committee explained the typical scenario: an insurer served by its own insured, where the defendants have no coverage, elects to appear in the name of one of the defendants rather than in its own name, and the attorney it hires files pleadings as counsel for that defendant, a device the statute allows because of potential jury bias against an insurance company. That arrangement differs from ordinary insurance-defense representation, where an attorney hired to represent an insured named as a defendant unquestionably has an attorney-client relationship arising out of the insurance contract. Here, the statute's purpose is to protect the insurance company's own financial interests, and the uninsured motorist retains a separate right to retain counsel. The Committee cited State ex rel. Allstate Insurance Co. v. Karl, 437 S.E.2d 749 (1993), recognizing that a lawyer who appears "as counsel" for an underinsured (already-represented) defendant is in fact representing the insurer's interest concerning its own potential liability.

The Committee concluded that the attorney who appears ostensibly on behalf of an uninsured motorist cannot ethically represent the motorist's interests, noting that W. Va. Code 33-6-31(f) gives the insurer a right to collect from the motorist any amount it pays the insured. The attorney therefore owes no duty of loyalty to the defendant, who should be treated as an unrepresented co-defendant and who may even be noticed for a deposition to explore coverage issues. Because the attorney represents the insurer while purporting to be the uninsured motorist's counsel, Rule 4.3 requires the attorney to explain in writing to the uninsured motorist that he or she does not actually represent the defendant, so the defendant knows the attorney-client privilege does not apply and that the defendant has the right to hire counsel. The Committee cited ABA Informal Opinion 1065 (1969), which held that under a comparable Tennessee statute the attorney hired by the carrier could not serve in a dual capacity as counsel for the carrier and the uninsured motorist.

Currency note

This opinion was issued in 1994, before the West Virginia Supreme Court of Appeals' comprehensive 2015 revision of the West Virginia Rules of Professional Conduct (effective January 1, 2015). 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: When an insurer defends in the name of an uninsured motorist, who is the lawyer's client?

A: The opinion concluded the lawyer represents the insurance company's interests, not the uninsured motorist's, because the statute lets the insurer appear in a defendant's name to protect its own financial interests.

Q: Does the lawyer owe the named defendant a duty of loyalty?

A: No. The opinion concluded the attorney owes no duty of loyalty to the defendant and that the defendant should be treated as an unrepresented co-defendant, noting the insurer's statutory right under 33-6-31(f) to collect from the motorist.

Q: What did Rule 4.3 require the lawyer to do?

A: The opinion concluded the attorney had to explain in writing to the uninsured motorist that he or she does not actually represent the defendant, so the defendant knows the attorney-client privilege does not apply and that the defendant may hire counsel.

Q: Could the lawyer depose the named defendant?

A: Yes. The opinion stated that, treating the defendant as an unrepresented co-defendant, the attorney may notice any party, including the defendant, for a deposition to explore coverage issues.

Background and rules framework

The opinion interpreted West Virginia's Rule 4.3 as it stood in 1994, governing a lawyer's dealings with an unrepresented person. The opinion quoted the rule in part: when a lawyer knows or reasonably should know that the unrepresented person misunderstands the lawyer's role in the matter, the lawyer shall make reasonable efforts to correct the misunderstanding. The analysis rested on the West Virginia uninsured/underinsured motorist statute, W. Va. Code 33-6-31(d) and (f), and on State ex rel. Allstate Insurance Co. v. Karl, 437 S.E.2d 749 (1993), with reference to ABA Informal Opinion 1065 (1969).

Citations and references

Rules of Professional Conduct:

• Model Rule 4.3 / WV Rule 4.3 (dealing with an unrepresented person; correcting a misunderstanding of the lawyer's role)

Statutes:

• W. Va. Code 33-6-31(d) (insurer's right to file pleadings in the name of an uninsured or underinsured owner or operator)
• W. Va. Code 33-6-31(f) (insurer's right to collect from the motorist amounts paid to the insured)

Cases:

• State ex rel. Allstate Insurance Co. v. Karl, 437 S.E.2d 749 (W. Va. 1993), lawyer appearing "as counsel" for an underinsured defendant in fact represents the insurer's interest

Other opinions cited:

• ABA Informal Opinion 1065 (1969): attorney hired by the carrier under a comparable statute cannot serve in a dual capacity for the carrier and the uninsured motorist

See also

• WV Ethics Op. 98-01: Flat-Fee Insurance Defense
• WV Ethics Op. 99-01: Insurance Captive Law Firms
• ABA Formal Op. 03-430: Insurance Staff Counsel

Source

• Landing page: https://wvodc.org/Legal-Ethics-Opinion
• Original PDF: https://storage.googleapis.com/msgsndr/Rgd68xOkcVdteTsBkf6O/media/66a7ea7df10bdc7c48ae4497.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain; the linked PDF is authoritative.

L.E.I. 94-02
DUTIES OF A LAWYER RETAINED
PURSUANT TO UNINSURED MOTORIST COVERAGE

An issue which arose in litigation prompted counsel for two parties to seek guidance from the Committee on Legal Ethics concerning the ethical responsibilities of an attorney retained under an insurance policy providing uninsured motorist coverage. Rather than addressing the specific facts presented, the Committee deems it appropriate to set forth general guidelines for such situations.

W. Va. Code, 33-6-31(d) states:

Any insured intending to rely on the coverage required by subsection (b) of this section [providing for uninsured and underinsured motorist coverage] shall, if any action be instituted against the owner or operator of an uninsured or underinsured motor vehicle, cause a copy of the summons and a copy of the complaint to be served upon the insurance company issuing the policy, in the manner prescribed by law, as though such insurance company were a named party defendant; such company shall thereafter have the right to file pleadings and to take other action allowable by law in the name of the owner, or operator, or both, of the uninsured or underinsured motor vehicle or in its own name.

Nothing in this subsection shall prevent such owner or operator from employing counsel of his own choice and taking any action in his own interest in connection with such proceeding.

Typically, the insurance company which has been served with a complaint by its insured when the defendants have no insurance coverage will elect to appear in the litigation in the name of one of the defendants instead of its own name. The attorney hired by the insurance company will then file pleadings as counsel for the defendant. The statute gives an insurance company the right to file pleadings in the name of a defendant, because of potential jury bias against an insurance company.

The questions arises as to who is the attorney's client and what duties are owed to the defendant in whose name pleadings are filed.

The uninsured motorist issue differs from the more common insurance defense representation. An attorney hired by an insurance company to represent its insured who has been named as a defendant unquestionably has an attorney-client relationship with the defendant arising out of a contractual agreement. The right of an insurance company to appear in litigation between the insured and the alleged tortfeasor is statutory.

The statute makes clear that the purpose of the insurance company appearing in the litigation is to protect its own financial interests. The uninsured motorist, as noted in the statute, still has a right to retain counsel to protect his or her own interests.

The Supreme Court of Appeals recognized that when a lawyer appears "as counsel" for a defendant who is underinsured (and who is already represented by counsel), the lawyer is in fact representing an insurance company's interest concerning its own potential liability. State ex rel. Allstate Insurance Co. v. Karl, ___ W. Va. ___, 437 S.E.2d 749 (1993). The issue in that case was which insurance company had the right to assume primary control of the defense.

The attorney who appears ostensibly on behalf of an uninsured motorist cannot ethically represent the motorist's interests. W. Va. Code, 33-6-31(f) gives the insurance company a right to collect from the motorist any amount it pays to the insured.

The attorney therefore owes no duty of loyalty to the defendant. The defendant should be treated as an unrepresented co-defendant. The attorney may notice any party, including the defendant, for a deposition to explore coverage issues.

The American Bar Association's Informal Opinion 1065 (1969) states that under a comparable Tennessee statute, the attorney hired by the insurance carrier could not serve in a dual capacity as counsel for the carrier and the uninsured motorist.

Since the attorney represents the interests of the insurance company while purporting to be the uninsured motorist's counsel, Rule 4.3 of the Rules of Professional Conduct requires the attorney to explain in writing to the uninsured motorist that he or she does not actually represent the defendant. The defendant needs to know that the attorney-client privilege does not apply and that the defendant has the right to hire counsel.

APPROVED this 5th day of May, 1994.

Stephen G. Jory, Chairman
Committee on Legal Ethics
The West Virginia State Bar

[Footnotes:]
1. This L.E.I. does not address potential conflicts or tensions an attorney may experience between the insured and the insurance company during such representation.
2. A similar issue might arise if an insurance company appears in a case pursuant to its uninsured motorist coverage and the defendant, who has no insurance, nevertheless retains his or her own attorney. This is a question for the courts.
3. Rule 4.3 provides, in part, that "when a lawyer knows or reasonably should know that the unrepresented person misunderstands the lawyer's role in the matter, the lawyer shall make reasonable efforts to correct the misunderstanding."