Can a lawyer represent an employer both in a tort suit (where the injured employee is an involuntary counterclaimant) and in defending against that same employee's workers' compensation claim?

Plain-English summary

Attorney A's client was injured in an auto accident and was employed by Albuquerque Public Schools (APS). The other driver sued APS on a respondeat superior theory, and A's client was joined as an involuntary counterclaimant in that tort action; Attorney B represented APS there. A then filed a workers' compensation suit against APS, and B entered an appearance for APS in that action too. A believed B was in a conflict because B's firm represented A's client's employer in the tort action while defending against A's client in the workers' compensation action; B disagreed, since all parties agreed A's client was acting within the course and scope of employment and negligence was not an issue in the compensation case. The opinion assumed B represented only APS, not A's client.

The opinion concluded the situation did not yield a clear answer but that a conflict did not presently exist, so neither the Code nor the Model Rules required B to withdraw from either or both suits. It cautioned, however, that B had to diligently evaluate his effectiveness: if he determined he could not represent APS in the tort action as completely as he could absent the workers' compensation action, he should withdraw. He also had to weigh the prejudice his client would suffer should an actual conflict arise (for example, evidence that A's client had been under the influence at the time of the accident) against the likelihood such a conflict would develop, recognizing that withdrawal after substantial preparation would be costly to APS. And he had to consider whether Canon 9 applied; if he concluded there was an appearance of impropriety, he had to withdraw.

The opinion framed the analysis under Canons 5, 6, 7, and 9 and Model Rules 1.7 and 1.1. Because there was no blatant conflict barred by Canon 5, it focused on competence (Canon 6), zeal within the law (Canon 7), and avoiding an appearance of impropriety (Canon 9). It noted B would need the cooperation of A's client as a witness in the tort action, and that this cooperation might diminish given the client's knowledge that B would oppose him in the compensation case, potentially impairing B's representation. Citing EC 5-1, EC 5-2, and EC 9-2, the opinion observed some risk that B's position on the conflict question could make his judgment less protective of his client, and suggested that prudence, though not a rule, might dictate that B discuss the possibility of a conflict with APS, referring to Unified Sewerage Agency v. Jelco, Inc. on the nature of the disclosure required.

Currency note

This opinion was issued in 1985, when New Mexico lawyers were governed by the former New Mexico Code of Professional Responsibility, which the State Bar later replaced with the Rules of Professional Conduct; it also predates the State Bar of New Mexico's November 3, 2008 revisions to those Rules (the New Mexico adoption of the ABA Ethics 2000 changes). The Canons and Ethical Considerations it cites are no longer in force. 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 one lawyer defend an employer in both a tort suit and the employee's workers' comp claim?

A: The opinion concluded no conflict presently existed and that the lawyer was not required to withdraw from either suit, while cautioning him to monitor for a conflict and withdraw if one developed.

Q: When would the lawyer have to withdraw?

A: The opinion stated the lawyer should withdraw if he could not represent the employer in the tort action as completely as he could absent the compensation action, or if he concluded there was an appearance of impropriety under Canon 9.

Q: What practical risk did the opinion identify?

A: It noted the lawyer would need the injured employee's cooperation as a witness in the tort action, and that this cooperation might diminish because the employee knew the lawyer would oppose him in the compensation case, potentially impairing the representation.

Q: Did the opinion require the lawyer to disclose the situation to the employer?

A: No rule required it, but the opinion suggested prudence might dictate that the lawyer discuss the possibility of a conflict with the employer, referring to Unified Sewerage Agency v. Jelco on the disclosure required.

Background and rules framework

The opinion analyzed the question under the former New Mexico Code of Professional Responsibility, Canons 5, 6, 7, and 9 (conflicts, competence, zeal, and appearance of impropriety) and Ethical Considerations 5-1, 5-2, and 9-2, together with Model Rules 1.7 and 1.1, in the setting of a lawyer representing one organizational client in two related suits adverse to the same individual.

Citations and references

Rules of Professional Conduct (former Code):

• Model Code Canons 5, 6, 7, 9 (conflicts; competence; zealous representation; appearance of impropriety), and EC 5-1, EC 5-2, EC 9-2
• Model Rules 1.7 (conflict of interest) and 1.1 (competence)

Cases:

• Unified Sewerage Agency v. Jelco, Inc., 646 F.2d 1339 (9th Cir. 1981), on the disclosure a lawyer must make to a client

See also

• NM Ethics Op. 1985-1: Insurer Defense Conflict
• NM Ethics Op. 1985-8: Divorce Representation Conflict

Source

• Landing page: https://www.sbnm.org/Leadership/Committees/Ethics-Advisory-Committee/Ethics-Advisory-Opinions
• Original PDF: https://www.sbnm.org/Portals/NMBAR/AboutUs/committees/Ethics/1985/1985-11.pdf

Original opinion text

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

Advisory Opinion 1985-11
No ethical violation has occurred, but the committee has some cautionary observations regarding the situation in which the attorneys requesting the opinion find themselves.
A. Facts Set Forth in the Request for Advisory Opinion.

1. The attorney requesting the advisory opinion ("Attorney A") represents a client who was injured in an automobile accident.
2. This client is employed by Albuquerque Public Schools ("APS").
3. The other driver involved in the accident with Attorney A's client has sued APS on a respondeat superior theory (the "tort action"). Attorney A's client is an involuntary counterclaimant in this action.
4. APS is represented in the tort action by Attorney B. Attorney B has agreed with Attorney A's suggestion to have the matter reviewed by a Bar Committee. Therefore, this Committee will consider Attorney A's request although the Committee's rules of procedure prevent it from answering requests pertaining to the conduct of other attorneys.
5. Attorney A then filed a workers' compensation lawsuit (the "workers' compensation action") against APS.
6. Attorney B has entered his appearance in the workers' compensation action on behalf of APS.
7. Attorney A believes that Attorney B and his law firm are in a conflict situation because they represent the employer of Attorney A's client in the tort action and are providing the defense against Attorney A's client in the workers' compensation action.
8. Attorney B and his law firm do not believe that a conflict exists because all parties agree that Attorney A's client was within the course and scope of his employment at the time the accident, which is the subject of the tort action, occurred and because negligence is not an issue in the workers' compensation action.
   Facts Not Set Forth in Requesting Letter
9. The basis upon which the court granted APS' motion to join Attorney A's client as an involuntary counterclaimant is not mentioned. Apparently, this was done to allow APS to pursue its counterclaim for reimbursement of compensation payments.
10. In addition, Attorney A seems to assert that Attorney B represents Attorney A's client in the tort action but Attorney B specifically denies such representation. This opinion is written assuming that Attorney B represents only APS in the two lawsuits.
    B. Advisory Opinion Requested
    Attorney A has requested an opinion as to whether Attorney B's representation of APS in both the tort action and the workers' compensation action constitutes an ethical violation.
    C. Opinion
    The situation presented to this committee for its opinion does not avail itself of a clear answer. It involves responsibilities which imaginably may become conflicting, but which are not obviously conflicting as in a case where a dispute arises between several clients of one attorney or law firm.
    It is the committee's opinion that a conflict does not presently exist. Under these circumstances, neither the Code of Professional Responsibility nor the Model Rules of Professional Conduct require Attorney B to withdraw from representation of APS in either or both of these lawsuits. Attorney B should, however, diligently evaluate his effectiveness to his client, and in the event that he determines that he cannot represent his client in the tort action as completely as he could if the workers' compensation action did not exist, he should withdraw. Likewise, he must consider the prejudice which his client would suffer should an actual conflict arise (such as the appearance of evidence that Attorney A's client had been under the influence of drugs or alcohol at the time of the accident) and weigh that prejudice against the degree of likelihood that such a conflict will develop. Attorney B's withdrawal after the case is substantially prepared would be costly to APS. Finally, Attorney B must consider whether Canon 9 applies to this situation. If he concludes that there exists an appearance of impropriety in his representation of his client in both cases, he must withdraw.
    D. Discussion
    Whether Attorney B may ethically represent his client, APS, in both of the lawsuits is directly or indirectly addressed by Canons 5, 6, 7 and 9 of the Code of Professional Responsibility and Model Rules 1.7 and 1.1 of the model Rules of Professional Conduct.
    Because Attorney B has not encountered a blatant conflict of interests, prohibited by Canon 5, we are more concerned with the ability of the attorney to represent his client competently, as required by Canon 6, zealously within the bounds of the law, as required by Canon 7, and that he avoid an appearance of impropriety, as required by Canon 9. In preparation of his case in the tort action, Attorney B will need the cooperation of Attorney A's client as a witness. The primary question facing Attorney B is whether that cooperation will be diminished because of Attorney A's client's knowledge that Attorney B will be representing APS against him in the workers' compensation case. If so, Attorney B's ability to represent his client may be impaired and he must consider withdrawing from at least one of the representations.
    Ethical Consideration 5-1 states that: "[n]either his personal interests, the interests of other clients, nor the desires of the third persons should be permitted to dilute [an attorney's] loyalty to his client." Under the circumstances presented to this committee, there is at least some risk that Attorney B may pursue his client's case more warily than if he were not concerned with the emergence of a conflict. Attorney B has taken the position that no conflict exists and that the possibility of a conflict arising is miniscule. As stated in Ethical Consideration 5-2, "a lawyer carefully should refrain from acquiring a property right or assuming a position that would tend to make his judgment less protective of the interests of his client." There exists some risk, however small, that Attorney B's position regarding the question of a conflict may "tend to make his judgment less protective of the interests of his client."
    In arriving at his decision, Attorney B is directed toward a careful reading of Ethical Consideration 9-2:
    "Public confidence in law and lawyers may be eroded by irresponsible or improper conduct of a lawyer. On occasion, ethical conduct of a lawyer may appear to laymen to be unethical. In order to avoid misunderstandings and hence to maintain confidence, a lawyer should fully and promptly inform his client of material developments in the matters being handled for the client. While a lawyer should guard against otherwise proper conduct that has a tendency to diminish public confidence in the legal system or in the legal profession, his duty to clients or to the public should never be subordinate merely because the full discharge of his obligation may be misunderstood or may tend to subject him or the legal profession to criticism. When explicit ethical guidance does not exist, a lawyer should determine his conduct by acting in a manner that promotes public confidence in the integrity and efficiency of the legal system and the legal profession."
    Prudence may dictate that Attorney B, even though there is no rule requiring it, discuss with his client, APS, the possibility of a conflict arising with regard to these lawsuits. For guidance of this disclosure to APS, Attorney B is referred to Unified Sewerage Agency v. Jelco, Inc., 646 F.2d 1339 (9th Cir. 1981). Although this is a case in which an actual conflict existed, the court discusses the nature of the disclosure which the attorney is required to make his client.