Summary: An attorney representing personal injury clients against an insurance company may not accept employment doing work for the mortgage department of the insurance company unless he obtains the consent of all parties after full disclosure and unless it is "obvious" that he can "adequately represent" the interests of all parties. On the facts of this inquiry, neither portion of that test is met.
Facts: An attorney has been offered employment doing real estate and mortgage work for the mortgage department of a major automobile insurance company. The mortgage department operates much the same as a bank in terms of granting mortgage loans and, although a part of the insurance company, it has no direct connection with the automobile insurance division. The attorney is currently representing personal injury plaintiffs who have brought suits against insureds of this insurance company. He asks whether he may accept the mortgage department's offer of employment if he advises his personal injury clients of the proposed employment and obtains "a waiver of no (sic) objection." He adds that he is clear that his professional judgment in handling the personal injury cases will not be affected by such employment.
Discussion: This inquiry raises two questions under DR 5-105, which provides, in relevant portion, as follows:
(A) A lawyer shall decline proffered employment if the exercise of his independent professional judgment in behalf of a client will be or is likely to be adversely affected by the acceptance of the proffered employment, or if it would be likely to involve him in representing differing interests, except to the extent permitted under DR 5-105(C).
(C) In the situations covered by DR 5-105(A) and (B), a lawyer may represent multiple clients if it is obvious that he can adequately represent the interests of each and if each consents to the representation after full disclosure of the possible effect of such representation on the exercise of his independent professional judgment on behalf of each.
The first question raised by the inquiry turns on the absence of any statement that the insurance company has consented to continuation of adverse representation by the inquirer and on what appears to be an insufficient consent after an insufficient disclosure to the personal injury plaintiffs. Nevertheless, the question may be raised whether DR 5-105 is applicable at all when the subject matters of the representations are different, and different parts of the insurance company are involved. That issue, however, was resolved by the Supreme Judicial Court in The McCourt Company v. FPC Properties, Inc., 386 Mass. 145 (1982). The court regarded as irrelevant the facts that the lawsuits were unrelated and that the client consisted collectively of a corporation and various wholly owned subsidiaries in holding that the undivided loyalty owed by a lawyer to his clients prevented him, without the consent of all concerned, from representing and suing a client at the same time. The inquiry does not set forth that there has been complete disclosure of all the possible effects on both clients. Nor does the inquiry set forth consent by the insurance company. It should also be noted that a question exists as to who should consent for the insurance company. The mortgage department may be pleased to do so, but the claims department may not be willing to do so, in that it may not be prepared to consent to representation of the insurance company by an attorney who simultaneously is bringing suit against insureds of the insurance company. Nor do we regard a "waiver of objection" by the personal injury clients as equivalent to consent.
The second, and more difficult, question raised by the inquiry is whether the attorney could undertake the proposed employment if there were appropriate consent, after full disclosure, by the insurance company and the personal injury clients. DR 5-105(C) requires in such a situation that, in addition to consent, it be "obvious" that the lawyer be able to "adequately represent" the interests of all concerned. This portion of DR 5-105(C) was not addressed by the Supreme Judicial Court in McCourt, although it has been considered a number of times by this committee. See MBA Opinions 80-1, 80-2, and 80-10, all advising against multiple representation in the circumstances of those inquiries notwithstanding consent because it was not "obvious" that the lawyer could "adequately represent" the interests of all parties.
The committee concludes that there are too many possibilities of mischance in this situation for it to be "obvious" that a lawyer can "adequately represent" the interest of all the parties. The conflicting pressures on a lawyer will be very great. Most importantly, he might consciously or unconsciously be influenced by the prospect of the proposed long-term work for the insurance company to be less than zealous in the manner in which he presses the claims of his personal injury clients. On the other hand, the lawyer might wish to avoid any later suspicion by the plaintiffs that he was influenced by that prospect. Such an inference could arise simply if the plaintiffs came to imagine bad reasons why the insurance company would consent to its lawyer appearing against it. The lawyer might therefore bend over backwards and take more uncompromising positions on behalf of personal injury clients than he normally would. He might also do that if he feared that plaintiffs had consented to his employment by the insurance company only because they knew that their cases were in progress and were afraid to anger him by refusing to consent. We do not address the question whether the inquirer is likely to be influenced in any of these ways. We believe that the obviousness test provides an objective standard and on the facts as presented to us, and without meaning to intimate any opinion about other factual situations, we have concluded that the potential for distorting the lawyer's independent professional judgment is sufficiently great that it is not "obvious" that he could "adequately represent" the interests of all parties if he were to accept the proposed employment.
Permission to publish granted by the Board of Delegates on January 22, 1985. As stated in the Rules of the Committee on Professional Ethics, this advice is that of a committee without governmental status.