LEO #1640 CONFLICT OF INTERESTS; REPRESENTING CLIENT IN MEDICAL
          MALPRACTICE CASE ARISING FROM INJURIES RESULTING IN WC
          CLAIM AFTER REPRESENTING SAME CLIENT IN THAT WORKMEN'S
          COMPENSATION CLAIM WHERE ATTY'S FEE WAS DEDUCTED FROM
          DOCTOR'S BILL AND PAID BY WORKMEN'S COMPENSATION
          CARRIER

You have presented a hypothetical situation in which an attorney
represents a claimant in a contested Workers' Compensation
matter.  As a result of the attorney's successful representation,
he is entitled to a pro rata contribution to his attorney fee
from each treating physician whose medical bills will now be paid
by the Worker's Compensation carrier pursuant to applicable
Virginia law.  The attorney submits all medical bills along with
a fee request, as required by the Workers' Compensation
Commission, and notifies all treating physicians of his intent to
collect a portion of his attorney fees from the sums due them for
treating his client.  One physician contacts the attorney to
negotiate the percentage of the attorney's fee to be paid out of
his medical bills directly with the attorney.  An amount is
agreed upon for both the medical and legal fees and paid by the
Workers' Compensation carrier in full.  Subsequently, the client
advises the attorney that he believes the physician with whom
attorney fees were directly negotiated may have negligently
treated his injuries and instructs the attorney to proceed with a
malpractice action.  The issue of the physician's alleged
malpractice was never raised during the fee negotiation.

You have asked the committee to opine on whether the attorney's
submitting and receiving payment of a percentage of his fees from
a physician's share of medical expenses after direct negotiation
with that physician on this matter creates a conflict of interest
that prohibits the attorney from later pursuing a medical
malpractice action as requested by his client.

The appropriate and controlling Disciplinary Rule related to your
inquiry is DR 5-105(D) which requires that a lawyer who has
represented a client in a matter shall not represent another
person in the same or substantially related matter if the
interests of the new person are adverse in any material respect
to the interests of the former client, unless the former clients
consents after full disclosure.

The committee is of the opinion that no conflict exists which
would prohibit the attorney from pursuing the client's
malpractice claim under the circumstances presented, since no
attorney-client relationship was established with the treating
physician (See LEOs  #1384, 1536, and 1457) or in derogation of
existing law [See Va. Code Section 65.2-714(B)].  An attorney-
client relationship must be created by mutual consent and not
involuntarily thrust upon either party. 

The conversation between the attorney and the client's treating
physician merely complied with the statutory law's directive to
resolve the issue of a pro-rata contribution by all medical
providers to the attorney's fee award.  Assuming that the issue
of alleged malpractice was not discussed with the physician, the
attorney never allowed his representation of his client's
interest to waiver.

The mere process of fee negotiation did not give rise to the
expectation that the discussion would be held in confidence. 
Moreover, the fee negotiation did not subject the attorney to any
impermissible influence of the physician which might effect the
attorney's representation of his client in the future malpractice
action.  The committee further assumes that the client consented
to the payment of some portion of his legal fees by the workers'
compensation carrier as negotiated out of fees owed to his
physician in accordance with Section 65.2-714 of the Code of
Virginia of 1950, as amended, which is self explanatory and
states:

     If a contested claim is held to be compensable under
     this title and, after a hearing on the claim on its
     merits or after abandonment of a defense by the
     employer or insurance carrier, benefits for medical
     services are awarded and inure to the benefit of a
     third party insurance carrier or health care provider,
     the Commission shall award to the employee's attorney a
     reasonable fee and other reasonable pro rata costs as
     are appropriate from the sum which benefits the third
     party insurance carrier. 

Thus the committee believes that, under the facts presented, the
attorney did not receive any compensation or payment of his legal
fees from the physician.  The attorney simply negotiated a
reduction of the physician's medical bill, which the client would
otherwise be obligated to pay.

[DR 5-105(D); LEOs 1384, 1457, 1536; Va. Code Section 65.2-714]

Committee Opinion
June 9, 1995