A lawyer is retained by an assignee of an insurance company to prosecute a subrogation claim against a car rental company. The same lawyer has been retained by the same car rental company and its insurance carriers to represent them in suits, unrelated to the subrogation claim, against various defendants for damages to the rental company’s cars suffered in automobile accidents. Is it ethical for the lawyer to represent the car rental company in the automobile accident cases while at the same time handling a claim against the car rental company in the unrelated subrogation matter?
The answer is no. An attorney representing a client in litigation may not accept employment from an adverse party even though both matters are unrelated and full disclosure has been made to both c1ients.
Canon 5 states “A Lawyer Should Exercise Independent Professional Judgment on Behalf of a Client.” EC 5-1 states:
“The professional judgment of a lawyer should be exercised within the bounds of the law, solely for the benefit of his client and free of compromising influences and loyalties Neither his personal interests, the interests of other clients, nor the desires of third persons should be permitted to dilute his loyalty to his client,”
It was held in N.Y. County 450 (1956) that it is improper for an attorney to represent the executor of a deceased client in a wrongful death action against her daughter while at the same time acting as attorney for the daughter in the prosecution of an unrelated personal injury action against a third party. The rationale was that even though there may have been no conflict of interest.
“(The) maintenance of public, confidence in the Bar requires an attorney who has accepted representation of a client to decline, while representing such client, any employment from an adverse party in any matter even though wholly unrelated to the original retainer’“
The same conclusion was reached in N.Y. City 71 (1926) where an attorney represented A Company in a suit pending against B Company, Thereafter, while the suit was pending, B Company asked the attorney to represent it in matters which had no relation to the pending litigation The Committee gave two reasons why it would be improper for the attorney to accept B Company s retainer: First, it is improper for the attorney to place himself in an inconsistent, position with relation to his client’s interests even if he discloses this fact, secondly, the acceptance of the proffered retainer would inevitably lead the client to believe the attorney might not he single-minded in his devotion to his interests. See also N.Y. City 130 (1930).
There are situations in which an attorney may represent multiple interests EC 5-15 suggests that, the attorney can do so but not in matters involving litigation:
“If a lawyer is requested to undertake or to continue representation of multiple clients having potentially differing interests, he must weigh carefully the possibility that his judgment may be impaired or his loyalty divided if he accepts or continues the employment, He should resolve all doubts against the propriety of the representation. A lawyer should never represent in litigation multiple clients with differing interests; and there are few situations in which he would be justified in representing in litigation multiple clients with potentially differing interests . . . . . “
See N.Y. County 597 (1972).
The interests of the car rental company and the assignee are adverse. Since the attorney will represent both in litigation there is the potential for conflict of interest or dilution of loyalty which cannot be resolved by full disclosure ever though the subrogation claims and car damage claims are unrelated.
January 10, 1974.