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OBA Ethics Counsel

Ethics Opinion No. 240

Adopted March 17, 1966

The following inquiry has been referred to this Committee by the Executive Council of the Oklahoma Bar Association:

Is a claims manager for an insurance company, who is also a qualified attorney, guilty of impropriety when he undertakes to communicate directly with the opposing party upon the subject of controversy, after he has knowledge that the party is represented by counsel?

Syllabus 1. Practice of Law. The adjustment of insurance claims by a member of the bar constitutes the practice of law.

Syllabus 2. Negotiations With Opposite Party. It is improper for a lawyer to communicate directly with an opposing party knowing him to be represented by counsel without the express consent of his counsel.

OPINION

1. The adjustment of insurance claims by a lawyer is professional employment. In performing such a service his professional skill and responsibility are engaged. It makes no difference that the member of the bar is engaged in a layman's work and is not holding himself out as an attorney. The impropriety arises when the business is of such a nature or is conducted in such a manner as to be inconsistent with a lawyer's duties as a member of the bar. Such an inconsistency arises when the business is of a nature that, if handled by a lawyer, would be regarded as the practice of law.

The fact that a layman can lawfully render certain service does not necessarily mean that it would not be professional service when rendered by a lawyer. On the contrary, lawyers are frequently called upon to render such service for the very reason that it can be better rendered by a lawyer.

It is the opinion of this Committee that the business of adjusting insurance claims is the practice of law when done by a lawyer, and as such, the attorney-adjuster must conduct himself with due observance of the standards of conduct required of him as a lawyer, and he is subject at all times to the Canons of Professional Ethics and to the same disciplinary measures as his fellow attorneys.

2. Canon 9 of the American Bar Association's Canons of Professional Ethics provides in part as follows:

"A lawyer should not in any way communicate upon the subject of controversy with a party represented by counsel; much less should he undertake to negotiate or compromise the matter with him, but should deal only with his counsel. ...."

This canon would appear to be a clear pronouncement that the questioned contact is improper, regardless of the view with which the contact is made.

Even should the client suggest a personal interview for the purpose of compromise without the consent of opposing counsel, it would be the duty of his lawyer to endeavor to dissuade him from so doing, as Canon 16 provides that, "A lawyer should use his best efforts to restrain and prevent his clients from doing those things which the lawyer himself ought not to do." Candor and fairness to his fellow lawyer should restrain a lawyer from giving sanction to such a personal interview, as Canon 22 states that, "The conduct of the lawyer before the Court and with other lawyers should be characterized by candor and fairness."

On the other hand, Canon 39 provides that a lawyer may properly interview any witness or prospective witness for the opposing side in any civil or criminal action without the consent of the opposing counsel or party.

Considered separately, Canons 9 and 39 might seem to produce different results. When read together, however, any apparent conflict is resolved. Though an opposing party is a prospective witness in the pending action, he is also a party represented by counsel. Since Canon 9 expressly condemns any communication with an opposing party, "upon the subject of controversy", Canon 39 must necessarily be construed to refer only to witnesses who are not adverse parties represented by counsel.

Based upon the foregoing, it is this Committee's opinion that it is ethically improper for an attorney-adjuster, even though he is not holding himself out as an attorney, to communicate directly with an opposing party known to him to be represented by counsel without consent of such counsel whether such communication be with a view to interviewing such party as a witness or a view to compromising the subject dispute.

See Canon 9, and Advisory Opinion 119 of the Oklahoma Bar Association, and Opinions 16, 22, 39, 57, 75, 124, and 187, and Informal Opinions No. 523 and 524 of the American Bar Association.