NUMBER 287 1931

Question. The attorney has a few negligence cases from his regular clients. Proper notices are filed with the Appellate Division. Suits are instituted. Settlements are attempted to be made by the attorney with the adjusters of the insurance company. Sometimes, adjustments are made. Other times offers are made which are not satisfactory.

There are people, not attorneys, who are skilled adjusters and are engaged in adjusting cases for attorneys. The usual procedure is to give the adjuster a statement of the facts and the amount desired in settlement. If the adjuster succeeds in getting the amount specified, he receives compensation from the attorney, usually a percentage. The adjuster has nothing to do with the client or the case, with the exception of using his skill in getting a better settlement. The only charge made to the client is the amount of the retainer.

Answer. Whenever this Committee has been consulted respecting questions which involve, directly or indirectly a division of a lawyer’s compensation with a layman, it has disapproved such practice. See Opinions 74; 47, II (a).

In the opinion of the Committee, if the lawyer finds it to the client’s interest to employ the adjuster with the consent of the client, the adjuster should be compensated by the client, though such compensation be paid from the amount of settlement. But the Committee invites attention to the dangerous possibility that the adjuster may in the course of his employment unlawfully practice law; and though justice to the client may require that the lawyer’s compensation should be reduced, the lawyer should not divide his fee with the adjuster or pay this expense therefrom.

In making answer to the question, the Committee does not thereby approve or encourage the employment of adjusters to arrive at settlements of negligence claims. It is, of course, fundamental that the lawyer cannot with propriety employ anyone to use personal influence based merely upon acquaintance or other contacts, as distinguished from services of a constructive character free from such influence.