American Bar Association (ABA) Ethics Committee Issues Formal Opinions On Conflicts Of Interest In Probate And Insurance Areas

Karen Rubin Esq.
June 5, 2008 — 1,047 views  

Lawyers should note two formal ethics opinions that the ABA Standing Committee on Ethics and Professional Responsibility has issued recently.

The first opinion examines a conflict-of-interest issue especially relevant to general practitioners and probate lawyers.  Let’s say you’ve done legal work for Testator and members of his family for several years.  Testator asks you to draw a will disinheriting Beneficiary, whom you (or your firm) currently represent in a landlord tenant dispute.  Can you accept the engagement from Testator?  Or does your concurrent representation of Beneficiary in an unrelated matter create a disabling conflict of interest under your state’s version of Model Rule 1.7(a)?

You may be surprised that Formal Ethics Op. 05-434 authorizes you to accept Testator’s engagement, unless there is a significant risk that your representation will be “materially limited” by your duties to Beneficiary.  The ABA Ethics Committee opined that the type of “direct adversity” barred by the Rules of Professional Conduct involves a conflict between two parties’ legal rights and duties – not just between two parties’ economic interests.  In this scenario, since Beneficiary has no legal right to an inheritance (only an expectation, at most), you are not necessarily conflicted out of representing Testator – particularly where Testator is engaging you to carry out the essentially ministerial act of drawing the will, and not to counsel him on his proposed course.

But what if the situation is more complicated?  For instance, what if you (or your firm) previously represented Testator, Beneficiary and other family members in coming up with synchronized estate plans?  Testator previously agreed with the estate planning objectives, but now wants to disinherit Beneficiary in favor of his new pet charity.  Formal Ethics Op. 05-434 advises that in that case, “the lawyer must consider her responsibilities to other family members who have been her clients for family estate planning.”  Under these circumstances, the lawyer may be materially limited from taking the assigment from Testator by duties of loyalty to the other family members.

In another recent opinion, Formal Ethics Op. 05-435, the ABA Ethics Committee advised that representing a liability insurer as a party in litigation does not by itself raise a conflict that would preclude you, in separate litigation, from representing another client against an insured of the liability insurer.  So, if your firm represents Insurance Co. in all its subrogation work, may you concurrently take on the representation of Passenger against Driver, if Driver is covered by Insurance Co.?  This ethics opinion says, “Maybe.” 

Although representing Passenger might not present a conflict of interest per se, several scenarios could arise that should give you pause.  For instance, might you “pull your punches” in the Passenger v. Driver case, knowing that Insurance Co. would be pleased if Driver won?  What if you have inside information about Insurance Co.’s business practices and settlement strategies that would be helpful to Passenger?  Or, what if effectively representing Passenger will require you to depose Insurance Co.’s representative?  These circumstances might indeed raise a concurrent conflict that could preclude representing Passenger, or mandate your withdrawal, because your responsibilities to Insurance Co. could place a material limitation on your representation of Passenger.

These two ethics opinions share a common feature – the engagements they authorize require you to assess the surrounding circumstances carefully, and continue to assess them over time.  In other words, you can proceed conflict-free – unless you can’t.

Karen Rubin Esq.

Thompson Hine LLP