Legal Ethics Opinion No. 1410

 Conflict of Interest--Multiple Representation: Representation of
Employer's Worker's Compensation Insurance Carrier and of
Employee in Related Products Liability Claim

You have advised that Counsel's law firm represents, on a
continuing basis, a Worker's Compensation insurance carrier.
Counsel accepted representation of an individual who was injured
while on the job and who had been paid Worker's Compensation
benefits by the carrier represented by Counsel's law firm.

You further indicate that Counsel filed a products liability suit
on behalf of the injured individual and that the Worker's
Compensation insurance carrier has a lien against any recovery
that may result from that lawsuit.  Counsel is also representing
the Worker's Compensation insurance carrier in this matter.

You have asked the committee to opine whether, under the facts of
the inquiry, there is a conflict in Counsel's continuing
representation of the individual and the Worker's Compensation
insurance carrier.

The appropriate and controlling Disciplinary Rules related to
your inquiry are DR 5-105(B) and DR 5-105(C).  Disciplinary Rule
5-105(B) states that a lawyer shall not continue employment if
the exercise of his independent professional judgment in behalf
of a client will be or is likely to be adversely affected by the
representation of another client, except to the extent permitted
under DR 5-105(C). Disciplinary Rule 5-105(C) requires that, in
the situations covered by DR 5-105(A) and (B), a lawyer may
represent multiple clients if it is obvious that he can
adequately represent the interest of each and if each consents to
the representation after full disclosure of the possible effect
of such representation on the exercise of his independent
professional judgment on behalf 
of each.  Of additional import are the requirements of DR 4-l0l
which define and describe the need for preservation of a client's
confidences and secrets.

The committee believes that the fact situation presented here is
analogous to that of an attorney representing an insurance
carrier in a personal injury claim filed by the employee/driver
under employer's uninsured motorist provision when the attorney
had earlier represented the employer/insured in the liability
matter, as in LEO #1310. The committee, in that instance, opined
that the proscriptions of DR 5-105(D) did not apply since the
interests of the former client, Defendant/insured, and the
present client, Insurance Company, presumably were not differing. 

The committee is of the opinion that Counsel's representation of
both the insurer and the employee of the insured would not be perse violative of DR 5-105(B) or (C). It appears that, since the
employee has a products liability action against a third party
and the insurer simply retains a lien against any proceeds of the
action, the interests of the two are not presently in conflict. 
However, since the interests of the two clients are potentiallydiffering, such as in the division, if any, of the proceeds and
the responsibility for costs and attorneys' fees, the
requirements of full disclosure and consent to the representation
by both clients, as articulated in DR 5-105(C), must be met. 
Furthermore, should the potential differing interests mature into
actual adverse interests, it may then become necessary for
Counsel to withdraw from representing both the employee/plaintiff
and the insurer or to obtain separate counsel for the issues
giving rise to a conflict.

The committee further cautions that Counsel, in representing
clients with potentially differing interests, must be mindful not
to reveal any confidences or secrets obtained from the
representation of one client to the other client or to use such
information for the advantage of the other client, without the
clients' explicit consent thereto, pursuant to DR 4-101.  See LEO

Committee Opinion
April 19, 1991