81-F-22 - Demand letters to adverse parties prior to suit

 

BOARD OF PROFESSIONAL RESPONSIBILITY OF THE SUPREME COURT OF TENNESSEE

FORMAL ETHICS OPINION 81-F-22

 

Inquiries have been made concerning the propriety of an attorney sending "demand letters" and copies of "excess letters" to adverse parties before suit is filed and before the adverse party is represented by counsel.

The proposed "demand letter" states the facts of the case and legal theories supporting the claim and a copy of a complaint proposed to be filed is enclosed stating that if the adverse party does not wish to compromise the claims, the enclosed complaint will be filed.

The proposed "excess letter" is to the insurance carrier with a copy to the adverse party, insured, stating that the claimant has offered to settle the claim within the policy limits. The letter also states that there is a substantial probability of a verdict in excess of the policy limits in the event of litigation and suggests that there may be a conflict of interest between the insurer and insured.

The Ethics Committee is of the opinion that there is no impropriety in an attorney writing such a "demand letter" or "excess letter" to an adverse party not represented by counsel or to adverse counsel. There is no impropriety in giving such notices or demands as required by statute, ordinance or rule and citing the authority. The claims for damages or injuries may be stated along with the alleged facts on which the claims are made. There is no impropriety in stating that appropriate civil action will be taken in event the claims are not settled. It is not improper to state legal theories, conclusions of law or to make reference to or cite laws, statutes, rules or similar authorities. It is not improper to enclose a proposed complaint.

This opinion is based on the premise that the actions contemplated are done in good faith in order to persuade the settlement of civil matters in furtherance of the principle that the law favors, the informal resolution of controversies through compromise and settlement rather than through litigation.

It is highly unethical and improper to state or imply to either the adverse party or adverse counsel that criminal action is contemplated to obtain an advantage in a civil matter or to state that any action is contemplated in order to harass, intimidate or injure another. An attorney is prohibited from threatening to present criminal charges to obtain a civil advantage. DR 7-105(A). An attorney is prohibited from taking action which is intended to harass, intimidate or injure another. DR 7-102(A)(1). An attorney is prohibited from giving advice to a person who is not represented by a lawyer other than the advice to secure counsel. DR 7-104(A)(2).

This 20th day of November, 1981.

ETHICS COMMITTEE:

Jack C. Raulston
A. B. Goddard
John T. Henniss

APPROVED AND ADOPTED BY THE BOARD