Ethics Question of the Month - February 2021

If I Could Turn Back Time

Attorney Jose is a staff lawyer with the ABC Insurance Company. ABC requires that the company approve all expert witnesses hired by its staff lawyers.  It also requires ABC’s attorneys to give the company 30-days notice of its intention to designate an expert so the company can consider whether to approve the expert designation.

Jose is handling a case in which he has 30 days to respond to opposing counsel’s “medical billing affidavit” with a controverting affidavit from an expert witness. This is an important disputed issue in this case, and he has not yet identified an expert. Given the time limits imposed by his employer, he will not be able to get ABC’s approval and file the affidavit on time, which will harm his client’s case.

                Jose feels like he is caught between conflicting loyalties to his client and his employer.  He considers the following courses of action: 

  1. Comply with ABC’s requirement and notify the client that he may not be able to hire an expert in time.
  2. Seek ABC’s permission for an exemption from the notice requirement and document this action in the event ABC refuses the request. 
  3. Seek ABC’s permission for an exemption from the notice requirement and, if ABC refuses, withdraw from the case.
  4. Resign from his job because the ABC guideline is inconsistent with his obligations to his client

Focusing on his ethical obligations under the Texas Disciplinary Rules of Professional Conduct (TDRPC), which of these options is the best course of action? 

ot only does this question highlight the difficulty a lawyer faces when his ethical obligations to his client conflict with his pecuniary or other interests, it also demonstrates the problems a lawyer can face when working for an institution where his superiors are non-lawyers who are not bound by the same ethical constraints as the lawyer.  Generally speaking, when a lawyer’s ethical obligations conflict with his personal interests, the ethics rules always win. 

                The Professional Ethics Committee Opinion for the State Bar of Texas addressed this specific issue in Ethics Opinion 687.  The Committee noted that it previously found in Ethics Opinion 533 that lawyers may not agree to  any “restrictions that interfere with the lawyer’s exercise of independent professional judgment in rendering legal services to the insured client,” even when counsel is employed by an insurance company to represent the company’s insureds. 

The Committee cited the Texas Supreme Court holdings that an insured’s lawyer “owes the insured the same type of unqualified loyalty as if he had been originally employed by the insured” and “must at all times protect the interests of the insured if those interests would be compromised by the insurer’s instructions.” Unauthorized Practice of Law Comm. v. American Home Assur. Co., 261 S.W.3d 24, 26-27 (Tex. 2008) quoting Employers Cas. Co. v. Tilley, 496 S.W.2d 552, 558 (Tex. 1973) and State Farm Mut. Auto. Ins. Co., v. Traver, 980 S.W.2d 625, 628 (Tex. 1998). 

                The Committee concluded:

[A] lawyer may not blindly comply with an insurance company's litigation guidelines. Instead, a lawyer must determine in each case and in each applicable situation whether a given directive is reasonable and consistent with the client's interests. As applied to the facts presented here, a staff lawyer should not allow the 30-day approval deadline for experts to materially compromise the insured client’s position. A lawyer who believes that a particular guideline interferes with her independent professional judgment in a case should try to persuade the insurer to withdraw or modify the limitation in that case.

The correct answer is C. 

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About Ethics Question of the Month

Ethics Question of the Month is a regular feature of the Texas Bar Journal created and sponsored by the Texas Center for Legal Ethics.

DISCLAIMER: The information contained in Ethics Question of the Month is intended to illustrate an ethics issue of general interest in the Texas legal community; it is not intended to provide ethics advice that applies regardless of particular facts.  For specific legal ethics advice, readers are urged to consult the Texas Disciplinary Rules of Professional Conduct (including their official comments) and other authorities and/or a qualified legal ethics advisor.

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