Can an insurer-retained defense lawyer waive an affirmative defense, like the statute of limitations, on behalf of both the insurer and the insured without the insured's consent?

Plain-English summary

The inquiry asked whether an attorney retained by an insurer to defend a tort claim could grant an extension of the statute of limitations on behalf of both the insurer and the insured, or whether the extension would have to be obtained directly from the insured.

The opinion concluded that, unless the insured has by contract surrendered to the insurer the authority to waive affirmative defenses, no such waiver should be undertaken by the attorney without the insured's consent. In a typical liability case, the lawyer employed by the insurer represents both the insurer and the insured, with the insured considered the lawyer's primary client, citing RPC 92. The opinion noted that Rule 7.1 obliges a lawyer to seek the client's lawful objectives through reasonably available means, and that a lawyer does not violate that rule by acceding to reasonable requests of opposing counsel that do not prejudice the client's rights. Because waiving an affirmative defense such as the statute of limitations would prejudice the insured's rights, the insured would have to consent to the waiver.

Currency note

This opinion was issued in 1991, before the North Carolina State Bar's adoption of the 2003 revisions to the Rules of Professional Conduct. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Can the insurer's defense lawyer extend the statute of limitations for the defense without asking the insured?

A: Generally no. The opinion held that, absent a contractual surrender of that authority to the insurer, the lawyer should not waive the statute-of-limitations defense without the insured's consent.

Q: Who is the defense lawyer's primary client?

A: The opinion held that, although the lawyer represents both the insurer and the insured, the insured is the primary client, citing RPC 92.

Q: Why does waiving the defense require the insured's consent?

A: The opinion held that waiving an affirmative defense like the statute of limitations would prejudice the insured's rights, so it falls outside the reasonable accommodations a lawyer may make for opposing counsel without client consent.

Background and rules framework

The opinion applied North Carolina Rule 7.1, requiring a lawyer to seek the client's lawful objectives while permitting reasonable accommodations to opposing counsel that do not prejudice the client (corresponding to the diligence and scope principles of Model Rules 1.3 and 1.2), together with RPC 92's identification of the insured as the primary client in insurer-funded defense. The analysis turns on the prejudice a limitations waiver causes the insured.

Citations and references

Rules of Professional Conduct:

• MR 1.2 (scope; client's objectives)
• MR 1.3 (diligence; pursuing the client's lawful objectives)
• North Carolina Rule 7.1 (seeking the client's lawful objectives; reasonable accommodations)

Other opinions cited:

• North Carolina RPC 92 (insured is the primary client in insurer-funded defense)

See also

• NC Ethics Op. RPC 140: representation of insured
• NC Ethics Op. RPC 156: informing the client when the insurer's defense ends

Source

• Landing page: https://www.ncbar.gov/for-lawyers/ethics-and-governing-rules/ethics-opinions/opinions/rpc-118/

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

Inquiry:

Can an attorney who is retained by an insurer to defend a tort claim grant an extension of the statute of limitations on behalf of both the insurer and the insured, or would an extension of time have to be obtained directly from the insured?

Opinion:

Unless the insured has by contract surrendered to the insurer the authority to waive affirmative defenses, no such waiver should be undertaken by the attorney without the consent of the insured. In a typical liability case, the lawyer employed by the insurer would represent both the insurer and the insured. The insured would be considered the lawyer's primary client. RPC 92. Generally speaking, a lawyer is obliged by Rule 7.1 of the Rules of Professional Conduct to "seek the lawful objectives of his client through reasonably available means permitted by the law and these rules,..." It is further provided that "a lawyer does not violate this rule, however, by acceding to reasonable requests of opposing counsel which do not prejudice the rights of his client,..." Because the waiver of an affirmative defense, such as the statute of limitations, would be prejudicial to the rights of the client, the insured, it would be necessary for the insured to consent to a waiver.