LEO: Conflict of Interest - Collection LE Op. 1210

 

Conflict of Interest - Collection Practice - Multiple Representation:

Attorney Filing Answers in Garnishment Proceeding on Behalf of

Client When Garnishment Was Initiated by Another Client of the

Firm.

 

April 26, 1989

 

You have advised that a law firm represents an industry which has

retained the firm to represent it on various matters and pays the firm a

monthly retainer for such representation. The representation is ongoing

and among the matters involved is the filing of answers on behalf of

industry employees in garnishment proceedings initiated by creditors of

those employees. The industry provides factual information for the

attorney to supply in the answer as required by 8.01-515 of the Code

of Virginia, and the attorney does not argue legal principles, nor does

the attorney attack the legal efficacy of the process. The attorney is

merely responsible for seeing that the answer is filed in a timely fashion

in the appropriate court.

 

You advise further that a different lawyer in the same firm represents a

corporation which frequently issues garnishment suggestions against

employees on whose behalf the first lawyer may be filing answers. The

information for these suggestions and garnishments comes solely from

information supplied to the law firm by the creditor corporation and no

employment information regarding employees is divulged to the creditor

corporation client by the industry client.

 

Both the industry client and the creditor corporation client are aware

that the law firm represents both clients and both consent to the law

firm's filing the answers to uncontested garnishments in the general

district court. In addition, the creditor corporation desires to maintain

a close relationship with the industry and has adopted a policy not to

contest any of the answers filed on behalf of the industry employees or

any of the factual statements therein. Both of the clients understand that

the law firm would not represent either party in the event that a debtor

employee of the industry would contest the garnishment.

 

You wish to know whether the law firm may file an answer on behalf of the

client industry in an uncontested garnishment proceeding in the general

district court when the garnishment was initiated by the law firm on

behalf of another client, the creditor corporation.

 

The appropriate and controlling disciplinary rule relative to your

inquiry is DR:5-105(C), which provides that multiple representation of

clients is permissible if it is obvious that an attorney can adequately

represent the interests of each client and if each consents after full

disclosure of the possible effect on the exercise of the attorney's

independent professional judgment on behalf of each in the multiple

representation. (See also LE Op. 725)

 

Since the timely filing of answers in an uncontested garnishment

proceeding is merely one of the various responsibilities undertaken by the

law firm on behalf of its client industry, and since both clients (the

industry and the creditor corporation) are aware of the multiple

representation and both have given their informed consent to the foregoing

representation, the substance of which will not be contested by the client

who initiated the garnishment, the Committee would opine that the multiple

representation in question is ethically permissible. Nevertheless, under

DR:5-105(C) the multiple representation is prohibited unless the law firm

is convinced that it can exercise its independent professional judgment on

behalf of each client and can adequately represent the interests of each.

The continued representation in question of both clients is not improper

provided that adequate disclosure continues to be made to each during the

representation and the clients' informed consent is obtained.

 

Committee Opinion April 26, 1989