The Florida Bar

Ethics Opinion

Opinion 70-58

March 1, 1971
Advisory ethics opinions are not binding.
An attorney may represent the insured in litigation against the insurer despite the fact that the
insurer is paying the fee. If the arrangement would prevent the attorney from exercising independent
judgment for his client, he should withdraw.

EC 5-23, DR 5-105, 5-105(B), 5-107(B)
Spadaro v. Palmisano, 109 So.2d 418 (Fla. 3d DCA 1959)
Chairman Massey stated the opinion of the committee:
The inquiring attorney was employed by an insurance carrier to represent its
owner and driver as defendants in a litigated case. A conflict appeared between
owner and driver over permissive use of the vehicle with the result that the inquirer
continued to represent the owner of the vehicle and, of course, the insurance carrier
while other counsel was retained for the driver. Later, the driver on deposition
testified so as to bring about a conflict between the owner and the insurance carrier,
with the inquirer then representing the owner and the carrier obtaining counsel of its
own. Apparently the insurance carrier is paying all of the counsel. The inquirer,
however, has found out from his “client,” the owner, information detrimental to the
owner’s interests and perhaps to the coverage to be afforded by the insurance carrier.
Additional investigation is necessary to evaluate the applicability of such
information. At the inquirer’s request, the owner obtained separate counsel to
actively pursue the investigation, it being the inquirer’s belief he would be violating
his duty to the insurance carrier paying his fee to try to prove coverage exists for the
owner when the insurance carrier has denied the same. He asks what steps should be

Of concern to the inquirer is the case of Spadaro v. Palmisano, 109 So.2d 418 (Fla. 3d DCA
1959), in which it was held that when counsel employed by a carrier to represent its insured has
reason to believe there is collusion (i.e., he does not believe the insured), it is not proper for counsel
to continue to represent the carrier and the insured. The case further held counsel’s successful
impeachment of the insured to be reversible error.
In most cases, the insurance carrier’s and owner’s (insured) interests coincide and there is no
conflict. In the event the carrier determines to deny coverage by reason of the insured’s conduct or
facts ascertained while engaged in the defense of a claim, the conflict arises between the carrier and
the owner. At that point, the carrier may deny coverage and withdraw all representation of the
owner, defending the claim under a reservation of rights. Assuming this latter course, however, it
seems clear the attorney representing the owner, although provided by the carrier, does not and must
not owe the carrier any duty as respects the issue of coverage.
EC 5-23 should be reviewed, as well as DR 5-107(B), which provides:

A lawyer shall not permit a person who recommends, employs or pays him to
render legal services for another to direct or regulate his professional judgment in
rendering such legal services.
Since in the instant inquiry the inquirer has been retained to represent the owner, albeit by
the carrier, and the carrier does have other counsel to protect its interests on coverage, the
Committee conceives of no impediment ethically for the inquirer to continue representing the owner
as to the liability action itself or any matter affecting coverage unless the inquirer is swayed in his
professional judgment as contemplated in DR 5-105.
However, assuming the attorney believes himself to be violating his duty to the insurance
carrier because it is paying his fee, he should withdraw from representing any party to the litigation,
as his conception of his ethical duties would prevent his exercising independent professional
judgment for his client, the owner. DR 5-105(B) is directly applicable.
Ethical considerations here stated cannot be varied by contractual provisions of the
insurance policy. Assuming a coverage question to exist, if the insurance carrier employing the
attorney who is representing the insured under a reservation of rights insists on controlling the
attorney in his defense of the owner, or otherwise influences the attorney’s conduct in defense of the
owner, then it is manifestly unethical for that attorney to represent the owner on behalf of the
carrier. In this inquiry, the attorney does not owe any duty to the carrier which would prevent his
continued representation of the owner. He is not subject to the carrier’s control and is not required
to disclose confidences or information from the owner or others involved in the matter to the carrier.