Did Formal Ethics Opinion 80-F-1 condemn all structured settlements, or just settlement offers that let the defense fix the plaintiff's attorney fee?

Currency note

This opinion was issued in 1981, before Tennessee's adoption of the 2003 Rules of Professional Conduct, which replaced the former Code of Professional Responsibility. Later opinions (including Formal Ethics Opinions 84-F-77 and 85-F-96) provided the comprehensive review of structured settlements this opinion said would follow. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Plain-English summary

The Board received requests to clarify certain language in Formal Ethics Opinion 80-F-1. Some Bar members felt the following statement in that opinion was overbroad: "The conflict of interest that arises from the fee interest potential of structured settlements is so inherently conducive to divided loyalties as to amount to a conflict of interest with the client."

The Board explained it was not the intention of the earlier opinion to condemn all structured settlements, as that sentence might imply; the quoted sentence was intended to be restricted to the facts of the inquiry the opinion addressed. It confirmed the Committee's holding is restricted to the earlier opinion's last sentence: that any arrangement by which the opposing party participates in setting the fee the attorney charges his own client conflicts with the language and intent of DR 5-107 and EC 5-22 of the Code. The Board added that the subject of structured settlements deserved a comprehensive review it would address in more detail in the near future.

Common questions

Q: Does Tennessee ethics guidance treat structured settlements themselves as improper?

A: No. The Board states "it is not the intention of the Opinion to condemn all structural settlements, as the sentence might imply," referring to Opinion 80-F-1's broader language.

Q: What is the actual, narrower holding of 80-F-1 after this clarification?

A: Only that the opposing party may not help set the attorney's fee. The Board confirms "the holding of the Committee is restricted to the last sentence of the Opinion: It is the opinion of the Committee that any arrangement by which the opposing party participates in the setting of the fee charged by the attorney to his client conflicts with the language and intent of DR 5-107 and EC 5-22 of the Code."

Q: Did the Board plan to say more about structured settlements generally?

A: Yes. It states "the subject of structural settlements deserves a comprehensive review and will be addressed in more detail by the Board in the near future."

Background and rules framework

The opinion clarified the scope of Disciplinary Rule 5-107 and Ethical Consideration 5-22 of the Tennessee Code of Professional Responsibility as applied in Formal Ethics Opinion 80-F-1. The modern correlates are Model Rule 1.5 (fees) and Model Rule 5.4 (professional independence of a lawyer), noted here as navigational cross-references rather than rules the opinion itself applied.

Citations and references

Rules of Professional Conduct:

• DR 5-107 (compensation from one other than the client) and EC 5-22, Tennessee Code of Professional Responsibility
• Model Rule 1.5 (fees) and Model Rule 5.4 (professional independence of a lawyer), modern correlates

Other opinions cited:

• Tennessee Formal Ethics Opinion 80-F-1: the opinion this one clarifies and narrows

See also

• Tenn. Ethics Op. 80-F-1: Defense-Conditioned Structured Settlement Fee
• Tenn. Ethics Op. 84-F-77: Fees in Structured Settlements
• Tenn. Ethics Op. 85-F-96: Fee Terms in Settlement Talks

Source

• Landing page: https://www.tbpr.org/ethic_opinions/80-F-1-supplemental

Original opinion text

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

80-F-1 - Structured Settlements

BOARD OF PROFESSIONAL RESPONSIBILITY OF THE SUPREME COURT OF TENNESSEE

FORMAL ETHICS OPINION 80-F-1-Supplemental

Requests have been received for clarification of certain language in Formal Ethics Opinion 80-F-1.

Certain members of the Bar feel that the following statement in that Opinion is overbroad:

The conflict of interest that arises from the fee interest potential of structured settlements is so inherently conducive to divided loyalties as to amount to a conflict of interest with the client.

It is not the intention of the Opinion to condemn all structural settlements, as the sentence might imply. The quoted sentence was intended to be restricted to the facts of the inquiry which the Opinion addressed. The holding of the Committee is restricted to the last sentence of the Opinion:

It is the opinion of the Committee that any arrangement by which the opposing party participates in the setting of the fee charged by the attorney to his client conflicts with the language and intent of DR 5-107 and EC 5-22 of the Code. [sig., Canons] The subject of structural settlements deserves a comprehensive review and will be addressed in more detail by the Board in the near future.

This 16th day of April , 1981.

ETHICS COMMITTEE:

Randall Burcham

W. H. Lassiter

George E. Morrow

APPROVED AND ADOPTED BY THE BOARD