Can a North Carolina lawyer represent several accident victims with claims against the same limited insurance fund?

Plain-English summary

A lawyer represented several passengers injured in a bus accident on their individual personal-injury claims. None was liable and there were no crossclaims, but the available insurance was insufficient to compensate everyone fully. The opinion addressed whether the lawyer could continue the multiple representation, and extended the analysis to school-bus claimants including minors and their parents.

The opinion concluded the lawyer may continue, with informed consent. It distinguished two kinds of conflict: potential crossclaims among claimants (which would make the lawyer an advocate against his own client and is ordinarily impermissible under Rule 5.1(a)), and competition for limited insurance funds without crossclaims (a lesser conflict that can be managed). Under Rule 5.1(b), a lawyer may represent a client even where the representation may be materially limited by duties to another client, if the lawyer reasonably believes the representation will not be adversely affected and the client consents after full disclosure of the risks and advantages. The lawyer may proceed where there is no liability conflict and each claimant gives informed consent at the outset, including an explanation of the consequences of limited insurance funds and the possibility of a dispute over dividing the proceeds. If the case is tried, the lawyer must zealously represent each claimant's damages and let the jury decide; if a settlement offer is made, the lawyer may facilitate mediation among the claimants or, only if he can act impartially, recommend an equitable division (RPC 123). The lawyer must withdraw from all claimants if cast as advocate for some against others, or if any claimant rejects the settlement (Rule 5.7), and may continue for one or more only with the consent of the claimants whose cases he relinquishes (Rule 5.1(d); RPC 123).

For the school-bus claimants, the opinion concluded the same rules apply: each claimant or legal guardian must give informed consent, and a lawyer may represent several children from one family. Before suit, a minor's parents or guardian may consent (RPC 123); after litigation begins (even just to obtain court approval of a minor's settlement), independent guardians ad litem must be appointed and must give informed consent, and to be independent a guardian ad litem must have no separate claim of his own, including a claim for a dependent child's medical expenses (RPC 109; RPC 123). The lawyer may represent the parents on their medical-expense claim and the minor through an independent guardian ad litem.

Currency note

This opinion was issued in 1997 and decided under the North Carolina Rules of Professional Conduct as numbered before the 1997 Revised Rules and the 2003 revisions; it cites the conflict rules under the older numbering (Rule 5.1(a), (b), (d); Rule 5.7), which correspond to today's conflict-of-interest and withdrawal provisions. 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 requirement mentioned here.

Common questions

Q: Can one North Carolina lawyer represent several victims of the same accident?

A: The opinion concluded yes, if there are no crossclaims among them and each gives informed consent at the outset, even where limited insurance funds put them in competition for the proceeds (Rule 5.1(b)).

Q: What must the lawyer disclose to the multiple claimants?

A: The opinion concluded the disclosure must include the consequences of limited insurance funds and the possibility of a dispute among the claimants over dividing the proceeds.

Q: When must the lawyer withdraw?

A: The opinion concluded the lawyer must withdraw from all claimants if placed in the role of advocate for one against another, or if any claimant refuses the settlement offer (Rule 5.7).

Q: What is required to represent injured minors?

A: The opinion concluded a parent or guardian may consent before suit, but once litigation begins, independent guardians ad litem must be appointed and consent; a guardian ad litem must have no separate claim of his own, including for a dependent child's medical expenses.

Background and rules framework

The opinion applied North Carolina's conflict-of-interest and withdrawal rules as then numbered (Rule 5.1(a), (b), (d), and Rule 5.7), the analogues to Model Rule 1.7 (and the withdrawal provisions now in Rule 1.16), to common representation of multiple accident claimants competing for limited insurance proceeds. It relied on prior opinions RPC 123 (dividing a settlement among multiple claimants) and RPC 109 (independent guardians ad litem for minors).

Citations and references

Rules of Professional Conduct:

• MR 1.7 (conflict of interest; current clients) / NC Rule 5.1(a), (b), (d) (1997 numbering)
• Withdrawal on unconsentable conflict / NC Rule 5.7 (1997 numbering)

Other opinions cited:

• RPC 123: a lawyer's role in dividing a settlement among multiple claimants
• RPC 109: independent guardians ad litem for minor claimants

See also

• ABA Formal Op. 06-438: Aggregate Settlements
• NC State Bar Op. 2001 FEO 6: Multiple Representation of Claims for Workers' Compensation Death Benefits

Source

• Landing page: https://www.ncbar.gov/for-lawyers/ethics-and-governing-rules/ethics-opinions/opinions/rpc-251/

Original opinion text

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

Inquiry #1:

Attorney A represents four unrelated adults on their individual claims for personal injuries arising out of an accident which occurred when the bus on which they were riding collided with an automobile. As passengers, none of the claimants is liable for the accident and there are no crossclaims between the claimants. Inadequate settlement offers were received and it is now apparent that the available insurance coverage is not sufficient to compensate all of the claimants fully. May Attorney A continue to represent the multiple claimants?

Opinion #1:

Yes, provided the claimants give informed consent to the multiple representation.

The representation of multiple claimants in a common accident can lead to two different conflicts of interest. On the one hand, there may be questions of liability and, therefore, potential crossclaims among the claimants. Representing clients with potential claims against each other places the lawyer in the position of being an advocate against his or her own client or clients and, ordinarily, is impermissible. See Rule 5.1(a). On the other hand, although there may be no crossclaims between the claimants, as in this inquiry, when there are limited insurance funds from which multiple claimants may be compensated, there is a potential for competition between the claimants for their share of the insurance proceeds. A lawyer who represents multiple claimants in this situation risks becoming an advocate for the increased recovery of one claimant at the expense of the other claimants. Nevertheless, this potential conflict does not involve directly antagonistic interests and can be more readily managed than the former conflict.

Rule 5.1(b) permits a lawyer to represent a client, even though the representation of the client may be materially limited by the lawyer's responsibilities to another client, if the lawyer reasonably believes that the representation of the client will not be adversely affected and the client consents after full disclosure including an explanation of the risks and advantages of common representation. In the current inquiry, a lawyer may determine that he or she will be able to facilitate an acceptable division of the insurance proceeds among the multiple claimants without advocating against the interests of any of the claimants. Moreover, to require each claimant to have a separate lawyer to prove liability may result in a duplication of effort and additional expense for the claimants. Therefore, a lawyer may represent multiple claimants provided there are no conflicts with regard to the liability issue and the lawyer obtains informed consent from all of the claimants at the beginning of the representation. The disclosure to the claimants must include an explanation of the consequences of limited insurance funds and the possibility that there may be a dispute among the claimants as to the division of the insurance proceeds.

If the case is tried, the lawyer must zealously represent the damage claims of each of the claimants and let the jury decide the amount that each will recover. If an offer of settlement is made, the lawyer may facilitate mediation among the claimants to determine how the offer will be divided. See RPC 123. Alternatively, the claimants may agree to accept the recommendation of the lawyer with regard to an equitable division of the settlement offer. The lawyer may make such a recommendation only if the lawyer can do so impartially. See RPC 123. The lawyer must withdraw from the representation of all of the claimants if the lawyer is placed in the role of advocate for one or more of the claimants against the other claimants. The lawyer must also withdraw from the representation if one or more of the claimants do not agree to accept the settlement offer. Rule 5.7. If the lawyer must withdraw, the lawyer may continue to represent one or more of the claimants only with the consent of the claimants whose cases the lawyer relinquishes. Rule 5.1(d) and RPC 123.

Inquiry #2:

Attorney A represents six minor children and two adults on their claims for personal injuries which occurred when the school bus in which they were riding was involved in an accident. It is assumed Attorney A also represents the parents of the minor claimants on their separate claims for the medical expenses incurred by their children. After receiving inadequate settlement offers, Attorney A filed suit. It then became apparent that the available insurance proceeds are insufficient to compensate all claimants fully.

May attorney A represent the eight injured claimants?

Opinion #2:

Yes, provided there are no crossclaims between the claimants and, at the beginning of the representation, each claimant, or claimant's legal guardian, gives informed consent to the multiple representation. See opinion #1 above. Before a lawsuit is filed, the parents or legal guardian of each minor may give such consent. RPC 123. After litigation is commenced, even if it is for the sole purpose of obtaining court approval of the settlements of the minors' claims, independent guardians ad litem must be appointed for the minors and the guardians ad litem must give informed consent to the multiple representation. To be independent, a guardian ad litem should have no separate claim of his or her own to pursue, including a claim for medical expenses for a dependent child. See RPC 109 and RPC 123. The disclosure at the beginning of the representation, and to the guardians ad litem, must include an explanation of the consequences of limited insurance funds and the possibility of a dispute among the claimants as to the division of the insurance proceeds. Rule 5.1 (b).

See opinion #1 with regard to the lawyer's role upon receipt of an offer to settle the multiple claims.

Inquiry #3:

In the situation described in inquiry #2, may Attorney A represent more than one child from the same family?

Opinion #3:

Yes, subject to the requirements set forth in opinions #1 and #2 above.

Inquiry #4:

May Attorney A represent the parents of one of the minor claimants on the parents' claim for medical expenses and also represent the minor child through an independent guardian ad litem?

Opinion #4:

Yes. See opinion #2 and RPC 123.