Assume that I represent, a claimant in a personal injury case arrising out of the negligent operation of a factor vehicle. Claim is presented upon, the responsible party and I thereafter receive a communication from an insurance company who Insures the wrongdoer s liability, I am informed by them that there is only a limited amount of insurance in force. I believe that the liability is unquestioned and that the injury has a value far in excess of the limits of the insurer’s contract, The insurer offers half of its policy limit in settlements which is totally unacceptable.
I am mindful of the fact that in instances where the insurers have unreasonable refused to settle actions within their policy limits when that was possible, they have been held liable to their insured’s for verdicts in excess of the policy limits based on their improper conduct.
May I, where the insured is not represented by counsel, in such a situation as outlined above, ethically communicate with the insured to apprise him of what has transpired and of his legal rights?
Would the answer be the same to the above if suit had been started and the insurance company’s attorney appeared for their insured?
It is the Committee’s opinion that Canon 9 of the Canons of Professional Ethics bars the proposed communication with the insured; it expressly provides that the attorney should not undertake to advise a party not represented by counsel as to the law.
Of course, after the insured is represented by counsel, the same Canon provides that an attorney should not communicate upon the subject of controversy with a party represented by counsel. We do not believe that the fact that the counsel, is furnished by the insurer changes the prohibition,
May 10, 1965