Legal Ethics Corner: Two’s a Company, Three Might Get You Disqualified: The Ethics of Joint Representation

By Joanna L. Storey, Hassard Bonnington

Amy retains Attorney to prosecute a personal injury action for an arm fracture she sustained in an automobile accident. Amy asks Attorney to meet with Bill who was rendered quadriplegic by the same accident. Bill’s claim is clearly more “valuable” as he will need a life care plan. His case will also require more time and cost. Attorney just learned the driver’s policy limits are $1M. Should Attorney agree to jointly represent Amy and Bill?

These facts trigger consideration of several Rules of Professional Conduct, which should be analyzed in advance of representation. For starters, Rule 3-310(C) prohibits a lawyer from accepting “representation of more than one client in a matter in which the interests of the clients potentially [or actually] conflict” without the informed written consent of each client.

Consider Rule 3-100, which requires members to preserve client secrets. While Attorney advised Amy and Bill he may not be able to maintain confidentiality between them, what if Amy tells Attorney she miscarried due to the accident and instructs Attorney not to tell Bill? How could Attorney give proper informed consent to Bill to accept a global settlement if this confidential injury results in a higher settlement than expected for Amy and reduces Bill’s share?

Don’t forget Rule 4-200, which lists several factors for setting fees, e.g., amount involved, results obtained and time/labor required. May Attorney charge Amy and Bill different rates for the same case since Bill’s case is complex? Rule 3-310(D) further prohibits a lawyer representing multiple clients from entering “into an aggregate settlement of the claims of or against the clients without the informed written consent of each client.” Attorney may find himself in a tight spot if the insurance limits are insufficient to cover the claims of both Amy and Bill, especially since Bill’s damages alone will exceed $1M. What if Bill won’t accept a settlement for policy limits and the defense can only settle globally, thus dragging Amy into a costly trial? Attorney must consider that resolution of Amy’s straightforward case may be substantially delayed while the defense refuses to resolve without full expert discovery of Bill’s catastrophic injury.

These issues are not exhaustive. Consider the duties of competency and communication (Rules 3-110 and 3-500), conflicts that develop during the representation and advance conflicts waivers. See San Diego County Bar Legal Ethics Opinion 2013-1; Zador Corp. v. Kwan (1985) 31 Cal.App.4th 1285.

The ethical challenges of joint representation are not unique to the plaintiff’s bar. The same rules must be consulted when Manager of Company seeks to retain Attorney to jointly represent Manager and Company in a third party action alleging fraudulent acts by Manager. What if Manager confidentially discloses to Attorney she doesn’t recall engaging in the alleged unlawful conduct because she has dementia, unbeknownst to Company’s owners? Can, worms, opened.

The takeaways: Attorneys should thoughtfully consider their ethical duties before representing multiple clients, obtain written informed consent should they proceed with joint representation and consider ethical issues as they arise during joint representation.

 

Joanna Storey is Senior Counsel at Hassard Bonnington where her litigation practice includes professional liability, catastrophic personal injury and complex commercial matters. She actively follows privacy, security and ethics developments and is a member of BASF’s Legal Ethics Committee.