ETHICS OPINION 546-1966 CONFLICTING INTERESTS

NUMBER 546

QUESTION.

 

Up until three months ago, my partner and myself were employed by a mutual Insurance company which has its home office in the City of New York, I terminated my employment after nine years of continuous service with the company. My partner was with the company for the same period of time, but his employment was not continuous in that the first three years of employment with the company was on a part-time basis, and subsequently, when he was working full time, he was associated with the Legal Aid Society for two years,

 

For the past three years, we worked in the Civil Court of the City of New York, I was in charge of evaluating all the claims pending against the company in that particular court, Except for holidays and summer recess, almost every day was spent in the Civil Court, New York County. During the time Court was closed, I devoted my time to evaluating and settling claims over the telephone and in person in the office, My partner, when not in Court, was assigned other duties not connected with the Civil Court work.

 

Previous to our assignment to the civil court in New York, my functions with the company varied from Calendar Clerk; preparation man; examiner; supervisor of Municipal Court (all boroughs); supervisor of city Court (all boroughs); and supervisor of the Civil Court.

 

My partner’s duties varied with sporadic court assignments and pleadings,

 

To be specific, our duties with the company for the past three years entailed negotiating every case that appeared on the trial calendars. The volume of cases on the various (pre-trial, masters, blockbusters, jury and non-jury) calendars was between thirty and seventy-five a day. Most of these cases were reviewed by either my partner or myself, In addition, I also reviewed, to a much lesser extent, on days of court recess, some cases which were not necessarily on the New York Calendar and some cases which were in suit, but not yet placed on the calendar. Very few claims were brought to my attention | that were not in suit, although on occasion I did negotiate some of them.

 

We are now engaged in private practice (our partnership was formed two years ago, but until we left the company. it was of minor consequence and very little time was devoted to it; but the time spent was our own and there was no conflict of interest at that time), and do much of counsel trial work. We service a number of attorneys as trial counsel with the majority of the cases pending in the Civil Court of the City of New York. The problem which arises is the question of the legal ethics involving our present relationship with our former employer.

 

We don’ t see any problems on cases which arose after our termination of employment. It should also be obvious that the cases which we read and negotiated should not be handled by us (even, though we have no present knowledge of the contents of these files due to the volume of the cases and the time lapse involved), but the problem arises concerning the cases that did not appear on the calendars in the time, including those on the calendar in other boroughs, those on the calendar in the Civil Court of New York, but not yet reached, thos those in suit, but not yet placed on the calendar, and those in. claim Both of us had access to all these files because there was an open file system. My partner had no occasion to review any of these claims, and I, as explained above, did negotiate some of them.

 

In order to fully service our forwarding attorneys, it seems that our practice will be curtailed, even to the extent of losing some clients, if we cannot take all their cases for trial, Some of those are now pending against our former employer.

 

ANSWER.

 

We think that it would be improper for the inquirer to act as plaintiff’s trial counsel in cases which were pending or in claim stage prior to the termination of his employment. Both he and his partner had access to all their former employer’s files and. the inquirer reviewed and negotiated claims, some of which may have now reached the trial stage.

 

While perhaps the volume of cases which the inquirer and his partner dealt with was such as to render it unlikely that they may remember confidential information previously obtained, this possibility is certainly not precluded, Indeed the mere fact that the files were available to them is enough to prevent accepting the present retainer See our Opinions 11, 207, 505 and also Opinion 567 of the Committee on Professional Ethics of the Association of the Bar of the City of New York.

 

A perhaps more difficult question is whether such retainer may be accepted in cases which arose after the termination of employment.

 

Whether the retainer can be accepted in such cases depends on whether the inquirer or his partner have any remaining obligation to their former employer which would prevent them from performing their full duty as trial counsel or whether to do so would involve the use of information about their previous employer which might now be helpful to a plaintiff. The Opinions cited above indicate the scope of the inquiry in these cases which the inquirer and his partner must themselves make. Even though the question as presented to us .is related only to retainers for the trial of cases, the trials will often involve settlements which in turn may involve interior policy matters of a confidential nature of the former employer.

 

June 9, 1966