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TCL > May 2013 Issue > Addendum to Formal Opinion No. 91—Ethical Duties of Attorney Selected by Insurer to Represent Its Insured (Adopted January 16, 1993; Addendum Approved February 23, 2013

The Colorado Lawyer
May 2013
Vol. 42, No. 5 [Page  26]

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In and Around the Bar
CBA Ethics Committee Formal Opinions

Addendum to Formal Opinion No. 91—Ethical Duties of Attorney Selected by Insurer to Represent Its Insured (Adopted January 16, 1993; Addendum Approved February 23, 2013

Following the issuance of Opinion 91, the Supreme Court repealed and reenacted all of the Colorado Rules of Conduct (Colo. RPC or Rules), effective January 1, 2008. Fundamentally, the reenacted Rules do not change the duties an attorney owes to the client, and perhaps to the third-party payor. The current Rules, however, do make some important changes relative to what constitutes "informed consent" and the process of securing a client’s consent within this tripartite relationship. The current Rules use the term "informed consent" instead of "consent after consultation." Under the repealed Rules, "consultation" required only "communication of information reasonably sufficient to permit the client to appreciate the significance of the matter in question." Although the American Bar Association Ethics 2000 Committee has stated that it intended no substantive change by replacing "consent after consultation" with "informed consent," the current requirement of "informed consent" "denotes the agreement by a person to a proposed course of conduct after the lawyer has communicated adequate information and explanation about the material risks of and reasonably available alternatives to the proposed course of conduct." Colo. RPC 1.0(e).

As discussed in the original Opinion, obtaining the client’s consent (now informed consent) is of paramount importance within the tripartite relationship of insurer, insured, and counsel. For example, the lawyer must obtain the client’s informed consent in order to accept fees from the insurance company or third party, Colo. RPC 1.8(f); to represent the client on less than all the issues in a particular litigation, Colo. RPC 1.2(c); to disclose client information to the insurance company or third–party payor, Colo. RPC 1.6(b); and to deal with conflicting or divergent interest between the paying party and the client regarding settlement or other issues, Colo. RPC 1.7(b).

Comment [6] to Rule 1.0 indicates that the crux of "informed consent" is that "the lawyer must make reasonable efforts to ensure that the client or other person possesses information reasonably adequate to make an informed decision." Current Rule 1.4(a)(1) also requires the lawyer to "promptly inform the client of any decision or circumstance with respect to which the client’s informed consent . . . is required[.]" In circumstances where the Rules require informed consent, the mere communication of information by the lawyer is not sufficient; the client must actually give the required informed consent. Actually, if the representation involves a concurrent conflict of interest between the client and the insurer or other third-party payor, the consent must be confirmed in writing. Colo. RPC 1.7(b)(4). These rule changes emphasize the need for full communication and candid explanation.

Additionally, the original Opinion states: "Even if the disclosed information involves perpetration of a fraud on the insurance company, the insured is still the client and the lawyer cannot disclose the information to the insurance company." However, current Rule 1.6 recognizes circumstances under which a lawyer may disclose fraudulent conduct of the client to the insurance company. In particular, Rule 1.6(b)(3) authorizes (but does not require) a lawyer to reveal information relating to the representation of the client which the lawyer "reasonably believes [is] necessary . . . to prevent the client from committing a fraud that is reasonably certain to result in substantial injury to the financial interests or property of another [including an insurance company] and in furtherance of which the client has used or is using the lawyer’s services." Rule 1.6(b)(4) provides that a lawyer may reveal information relating to the representation of the client which the lawyer "reasonably believes [is] necessary . . . to prevent, mitigate or rectify substantial injury to the financial interests or property of another [including an insurance company] that is reasonably certain to result or has resulted from the client’s commission of a crime or fraud in furtherance of which the client has used the lawyer’s services."

Similarly, a lawyer may be required to disclose to a tribunal information that would otherwise be protected by Colo. RPC 1.6 in order to remedy a prior offering of false evidence. See Colo. RPC 3.3(a)(3); CBA Formal Op. 123, "Candor to the Tribunal and Remedial Measures in Civil Proceedings" (2011).

© 2013 The Colorado Lawyer and Colorado Bar Association. All Rights Reserved. Material from The Colorado Lawyer provided via this World Wide Web server is protected by the copyright laws of the United States and may not be reproduced in any way or medium without permission. This material also is subject to the disclaimers at http://www.cobar.org/tcl/disclaimer.cfm?year=2013.


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