Inquiry is made as to the propriety of an attorney representing a client while also representing the client's health insurer claiming a subrogation interest for medical bills of the client's.
The attorney originally represented a client on her personal injury case. Later, the attorney agreed to represent the client's health insurer who claimed a subrogation interest for the medical bills of the client's. Pursuant to the client's instructions, the attorney settled the client's personal injury case, without first advising or consulting with the client's health insurer.
An attorney who represents a client may also enter into a contract with the client's health insurance provider to collect funds the client is contractually obligated to reimburse the health insurance provider pursuant to a subrogation clause in the client's health insurance contract. South Carolina Ethics Opinion 91-25 (October, 1991). An attorney may represent the client and the client's health insurance provider if it is obvious that the lawyer can adequately represent the interests of each and if each consents preferably in writing to the representation after full disclosure of the possible effect of such representation. DR 5-105(C).
With regard to the attorney's handling of a settlement, DR 5-106(A) states:
"A lawyer who represents two or more clients shall not make or participate in the making of an aggregate settlement of the claims of or against his clients, unless each client has consented to the settlement after being advised of the existence and nature of all the claims involved in the proposed settlement, of the total amount of the settlement, and of the participation of each person in the settlement."
Therefore, the attorney representing both his original client and also his client's health insurance provider must advise both clients of the existence and nature of the proposed settlement. At the time of the initial contact by the health insurance provider, the attorney should advise the health insurance provider both orally and in writing that if both clients do not agree on the proposed settlement, then the lawyer may not continue his multiple employment and must withdraw from representing the health insurer.
This 8th day of September, 1995.
James M. Glasgow, Jr.
Herman Morris, Jr.
Frankie E. Wade
APPROVED AND ADOPTED BY THE BOARD