Ethics for the Workers’ Compensation Practitioner1

By Wanda Blanche Taylor
Deputy Commissioner
N.C. Industrial Commission


From January 1, 1974 until December 31, 1985, North Carolina lawyers were regulated by the North Carolina Code of Professional Responsibility. From January 1, 1986 until July 23, 1997, North Carolina lawyers were regulated by the Rules of Professional Conduct. From July 24, 1997 until February 26, 2003, North Carolina lawyers were regulated by the Revised Rules of Professional Conduct of the North Carolina State Bar. On February 27, 2003, the 2003 Revised Rules of Professional Conduct took effect. Opinions by the North Carolina State Bar adopted under the Code of Professional Responsibility are denoted “CPR” and opinions adopted under the Rules of Professional Conduct are noted as “RPC”. Opinions adopted under the Revised Rules of Professional Conduct of the North Carolina State Bar and the 2003 Revised Rules of Professional Conduct are denoted as “FEO”. The editor’s note of the 2003 Revised Rules of Professional Conduct indicates that the CPR and RPC opinions “still provide guidance on issues of professional conduct except to the extent that a particular opinion is overruled by a subsequent opinion or by a provision of the 2003 Revised Rules of Professional Conduct”. In this manuscript, the 2003 Revised Rules of Professional Conduct of the North Carolina State Bar will be referred to as “the Rules”. All rules cited, unless otherwise noted, are rules contained in the 2003 Revised Rules of Professional Conduct of the North Carolina State Bar. The 2003 Revised Rules of Professional Conduct as well as CPR opinions, RPC opinions and FEO opinions are contained in the North Carolina State Bar 2003 Lawyer’s Handbook. This publication is updated yearly. The Rules and FEO opinions are updated quarterly in The North Carolina State Bar Journal.

I. Purpose of the Rules

The preamble of the Rules establishes that a lawyer has a responsibility to represent clients, to be an officer of the legal system and to be a public citizen having a special responsibility for the quality of justice. It indicates that a lawyer should be competent, prompt and diligent and should keep in confidence information relating to representation of a client. Section 0.1(4) indicates that a lawyer’s conduct must conform to the requirements of the law both in professional service to clients and in the lawyer’s business and personal affairs and that a lawyer’s use of the law only be for legitimate purposes and not to harass or intimidate others. A lawyer’s conduct shall always demonstrate respect for the legal system and for those who serve it including judges, other lawyers and public officials. Finally, the lawyer is encouraged, through charity and public service, to assure the availability of legal services to all and to use his education and experience to improve society. “The rules recognize that virtually all difficult ethical problems arise from conflict between a lawyer’s responsibilities to clients, to the legal system and to the lawyer’s own interest in remaining an upright person while earning a satisfactory living”. Section 0.1(12). The preamble cautions that “the rules do not, however, exhaust the moral and ethical considerations that should inform a lawyer, for no worthwhile human activity can be completely defined by legal rules. The rules simply provide a frame work for the ethical practice of law.”

II. Hot Topics

            A. Communicating With a Represented Person Through an Agent

            This inquiry was originally submitted to the Ethics Committee in 2001. Since that time, four proposed responses to the inquiry have been published for comment under the designation Proposed 2001 FEO 13. Because of the delay in publication, the opinion which was formally adopted in the Fall 2003 North Carolina State Bar Journal has been renumbered as a 2003 Ethics Opinion (2003 FEO 4) to reflect that citations in the Opinion are to the 2003 Revised Rules of Professional Conduct.

            The Committee has taken up this inquiry eight times since the inquiry was referred to subcommittee in April 2001. The opinions have vacillated between whether the defense attorney can or cannot offer evidence gained during a private investigator’s communication with a represented injured worker.

April 25, 2001 Committee referred inquiry to subcommittee
July 25, 2001

Opinion proposed and published for comment (cannot offer)

October 13, 2001 Opinion revised (cannot offer)
April 17, 2002 Opinion revised (second revision) (can offer)
July 17, 2002 Opinion revised (third revision) (cannot offer)
October 16, 2002  Committee held opinion over for further consideration
January 2003 Opinion revised (fourth revision) (can offer)
April 18, 2003 Opinion revised (fifth revision) (can offer)
July 25, 2003 Bar counsel adopted 2003 FEO 4 (can offer).

            Inquiry #1: Attorney represents the employer and the workers’ compensation carrier in a workers’ compensation case filed by plaintiff, an injured employee. Attorney knows that plaintiff is represented by legal counsel. Attorney hired a private investigator to watch plaintiff to see if plaintiff engaged in any physical activity indicating that he is not injured to the extent that he claims. Attorney instructed the private investigator not to engage plaintiff in conversation. During the surveillance, the investigator ignored attorney’s instructions and engaged plaintiff in conversation about a motel property located next to plaintiff’s property. As a pretext for the communication, the investigator told plaintiff he was interested in purchasing the motel property. During the conversation, plaintiff stated that he was repairing the motel property from storm damage. The investigator’s observations of plaintiff during the remainder of the surveillance, without further verbal contact with plaintiff, indicate that plaintiff is physically able to work.

            Opinion #1: Rule 4.2(a) of the Rules prohibits the lawyer from communicating about the subject of the representation with a person the lawyer knows to be represented by another lawyer in the matter unless the other lawyer consents or the communication is authorized by law. A lawyer may not do through an agent that which the lawyer is prohibited by the Rules from doing himself. Rule 5.3. The Ethics Committee declines to opine on the admissibility of evidence. However, to discourage unauthorized communication by an agent of a lawyer and to protect the client-lawyer relationship, the lawyer may not proffer the evidence of the communication with the represented person, even if the lawyer made a reasonable effort to prevent the contact, unless the lawyer makes full disclosure of the source of the information to opposing counsel and to the Court prior to the proffer of evidence. See Rule 3.3, Rule 4.1.

            Inquiry #2: If the information gained from the investigator’s conversation with plaintiff may not be used at trial, may attorney still offer the evidence gained through the investigator’s visual observations of plaintiff?

            Opinion #2: Yes. Visual observation is not a direct contact or communication with a represented person and does not violate Rule 4.2(a).

            It is important to note that this opinion does not rule that the information gained by the investigator while speaking to the plaintiff is admissible, merely that it is not unethical for defense counsel to proffer the evidence. Defense counsel may only ethically proffer this evidence if he or she makes full disclosure of the source of the information to opposing counsel and to the Court prior to the proffer of the evidence.

            Upon defense counsel’s disclosure of the source of the information to opposing counsel and the Court, it appears that the Court (or in this case the Commission) is free to determine that such evidence is inadmissible due to the method by which it was obtained.

            It is disturbing that the opinion does not specifically state that the attorney is under an obligation to instruct the private investigator not to engage the plaintiff in conversation. In practical terms, I believe that it is a cause for concern that this opinion, rather than discouraging this type of contact will actually promote it.

            Query: In addition to the issue of contacting directly and without permission a plaintiff who is represented, this ethics inquiry raises questions regarding the dishonest and perhaps fraudulent behavior of the investigator. How does the workers’ compensation fraud statute N.C.G.S. §97-88.2 impact on the investigator’s actions as well as the actions of the employer, carrier and defense attorney? N.C.G.S. §97-88.2(a) provides that any person who willfully makes a false statement or representation of material fact for the purpose of obtaining or denying any benefit or payment, or assisting another to obtain or deny any benefit or payment under this Article, shall be guilty of a Class 1 misdemeanor if the amount at issue is less than $1,000.00. Violation of this section is a Class H felony if the amount at issue is $1,000.00 or more.

            It should be noted that compliance with the ethics rules does not necessarily protect a person from penalties be they civil or criminal.

            B. Ex Parte Communication with Medical Providers

In a workers’ compensation case, a physician may not engage in ex-parte communications with the defendant. Salaam v. N.C. Department of Transportation, 122 N.C. 83, 468 S.E.2d 536 (1996), disc. rev. improvidently allowed, 345 N.C. 494, 480 S.E.2d 51 (1997) (citing Crist v. Moffatt, 326 N.C. 326, 389 S.E.2d 41 (1990). Salaam applied the holding in Crist v. Moffatt to adversarial proceedings before the Industrial Commission and recognized the public policy interest in protecting patient privacy in light of the adequacy of formal discovery procedures. A physician who engages in ex-parte communications with the defendant also violates the ethical standards of the medical profession which provide that a physician should not reveal confidential communications or information without the express consent of the patient, unless required to do so by law. Salaam does not, as a matter of law, prohibit communication between rehabilitation professionals and plaintiff’s nonparty treating physician. However, if the rehabilitation professional is the agent of the defendant rather than a neutral and unbiased professional, Salaam will apply. Jenkins v. Public Service Co. of N.C., 134 N.C. App. 405, 518 S.E.2d 6 (1999), reversed on other grounds, 351 N.C. 341, 524 S.E.2d 805 (2000).

            RPC 224, an ethics opinion rendered on October 24, 1997 shortly after the Salaam decision, prohibits an employer’s lawyer from engaging in direct communications with the treating physician for an employee with a workers’ compensation claim. The opinion indicates that an attorney for an employer may not contact the employee’s treating physician to discuss the employee’s medical treatment privately without the consent of the employee or the employee’s attorney. The opinion merely refers to the Salaam decision.

C. Medical Record Requests

            1. Subpoenas

            North Carolina Rules of Civil Procedure, Rule 45 was amended effective October 1, 2003. Rule 45(a)(2) provides that “a command to produce evidence may be joined with a command to appear at trial or hearing or at a deposition, or any subpoena may be issued separately”. Rule 45(b)(2) provides that a copy of such a subpoena also be served upon each party.

            The amendment to Rule 45 now allows a party to subpoena documents without subpoenaing a witness for deposition. Consequently, although there has been no action by the Ethics Committee on this topic since the amendment, the effects of 99 FEO 2 and RPC 236 now appear to be significantly limited. 99 FEO 2 rules that a defense lawyer may suggest that the records custodian of plaintiff’s medical records deliver the medical records to the lawyer’s office in lieu of an appearance at a noticed deposition, provided plaintiff’s lawyer consents thereto. The opinion discusses that RPC 236 holds that it is unethical for a lawyer to mislead the custodian of documentary evidence as to the lawyer’s authority to require the production of documents. A lawyer may obtain medical records in the manner described only if there is an agreement between the lawyers to waive the deposition and allow the medical records custodian to deliver the medical records directly to the opposing lawyer. Of course, after a case is called for trial and a physician is subpoenaed as a witness, defense counsel may accept medical records in the mail from the physician as allowed by RPC 180 and Rule 45(c) of the North Carolina Rules of Civil Procedure. It now appears that a lawyer may subpoena the records from the doctor without prior consent, but notice of the subpoena must be served on all parties.

            In workers’ compensation cases the employer, carrier or their attorney frequently writes the plaintiff’s treating physician in denied claims seeking medical records without a release. In many of these letters N.C.G.S. §97-27 is invoked to support these attempts. This is a misstatement of the law, and while there is no ethics opinion specifically addressing this issue, RPC 236 clearly indicates that it is unethical for a lawyer to mislead the custodian of documentary evidence as to the lawyer’s authority to require production of documents.

            D. Revised Rules Concerning Attorney’s Fees

            1. Contingency Fees

            Under Rule 1.5(c) as revised in 2003, contingent fee agreements must be signed by the client, must include an explanation of the method used to calculate the fee, must discuss client expense liability, and the agreement must be confirmed in writing. Rule 1.5(c) provides that a fee may be contingent on the outcome of the matter for which the service is rendered, except in a matter in which a contingent fee is prohibited by Paragraph (d) or other law. A contingent fee agreement shall be in a writing signed by the client and shall state the method by which the fee is to be determined, including the percentage or percentages that shall accrue to the lawyer in the event of settlement, trial or appeal; litigation and other expenses to be deducted from the recovery; and whether such expenses are to be deducted before or after the contingent fee is calculated. The agreement must clearly notify the client of any expenses for which the client will be liable whether or not the client is the prevailing party. Upon conclusion of a contingent fee matter, the lawyer shall provide the client with a written statement stating the outcome of the matter and, if there is a recovery, showing the remittance to the client and the method of its determination.

            2. Fee Splitting

            Under Rule 1.5(e) as revised in 2003, clients must agree to a fee splitting arrangement between lawyers in separate firms, including the amount each firm will receive, and the agreement must be confirmed in writing. Fee splitting is only allowed between lawyers who are not in the same firm if the division is in proportion to the services performed by each lawyer or each lawyer assumes joint responsibility for the representation, the client agrees to the arrangement including the share each lawyer will receive, the agreement is confirmed in writing and the total fee is reasonable.

            3. Disbursements to Medical Providers in Absence of a Medical Lien

            2001 FEO 11 rules that when a client authorizes a lawyer to assure a medical provider that it would be paid upon the settlement of a personal injury claim, the lawyer may subsequently withhold settlement proceeds from the client and maintain the funds in her trust account although there is no medical lien against the funds, until a dispute between the client and the medical provider over the disbursement of the funds is resolved. Rule 1.15 generally requires a lawyer to disburse settlement proceeds in accordance with the client’s instructions unless the medical provider has managed to perfect a valid physician’s lien. In such a situation, the lawyer is relieved of any obligation to pay the funds to his or her client and may pay the physician directly if the claim is liquidated, or retain in his or her trust account any amounts in dispute pending resolution of the controversy. Several ethics opinions hold that settlement funds belong to the client who has the right to determine how to disburse the funds unless there is a valid lien against the funds. However, if a client instructs an attorney to pay the proceeds to the client rather than the medical providers, the lawyer may ignore this instruction if there is a valid lien against the proceeds or other valid legal assignment of the rights in the proceeds. Revised 2000 FEO 4. The attorney must determine whether the assignments given by the client to the medical providers are valid and whether they create liens against the proceeds. This opinion clarifies when a lawyer may withhold settlement funds from a client when in the absence of a valid medical lien or assignment, a client instructs a lawyer to disregard a “letter of protection” or some other specific representation to a medical provider that it would be compensated, in whole or in part from settlement proceeds. The opinion holds that when a lawyer makes a representation to a third party with the knowledge and authorization of a client, the representation should be honored. If between the time that a medical provider is told that it would be paid and the time the settlement or judgment proceeds are received a dispute arises between the client and the medical provider over the medical bill, in the absence of a liquidated medical lien against the funds, the lawyer may not unilaterally decide whether the funds rightly belong to the medical provider or the client. In that case, the lawyer may hold the portion of the proceeds allegedly owed to the medical provider in her trust account until the impasse between the parties is resolved by order of the court or by interpleading the funds to the court. To ensure that medical providers are not mislead, any “letter of protection” or other assuredness of payment given to a medical provider must explain that the lawyer will hold disputed settlement funds in the trust account in the event that the client subsequently instructs the lawyer not to pay the medical provider.

III. Recent Formal Ethics Opinions

            A. Responding To Opposing Counsel’s Mental Health Problem 2003 FEO 2

            This opinion was adopted by the State Bar Council on October 24, 2003 and rules that a lawyer must report to the North Carolina State Bar a violation of the Rules of Professional Conduct as required by Rule 8.3(a) even if the lawyer’s unethical conduct stems from mental impairment (including substance abuse). In this instance Attorney A and Attorney B represent opposing parties in a legal matter. Attorney A’s behavior has led Attorney B to suspect Attorney A has a serious mental health problem (or possible substance abuse problem) that may be interfering with the representation of Attorney A’s client.

First, this opinion rules that Attorney B may not communicate with Attorney A’s client as Rule 4.2(a) prohibits communication about the representation with a person a lawyer knows is represented by another lawyer.

            Although a lawyer must competently and diligently represent her clients, she does not have a duty to press every advantage particularly when such conduct is inconsiderate or repugnant. Rule 1.2(a)(2) provides that a lawyer does not violate the duty to abide by the client’s decisions relative to the objectives of the representation by avoiding offensive tactics or treating with courtesy and consideration all persons involved in the legal process. To resolve this conflict a lawyer may make a confidential report to the Lawyer Assistance Program (LAP) of the State Bar and/or seek the Court’s oversight when appropriate.

            Attorney B is not required to report her observations about Attorney A’s mental health to the State Bar unless she has knowledge of an actual violation of the Rules of Professional Conduct. Rule 8.3(a) requires a lawyer who knows that another lawyer has committed a violation that raises a substantial question as to that lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects to inform the North Carolina State Bar or the Court having jurisdiction over the matter. Rule 0.1 underscores a lawyer’s obligation to the legal system and would encourage the lawyer to communicate the situation of a distressed lawyer to LAP. Attorney B may report to an approved lawyer assistance program without regard to whether she has knowledge of a violation of the Rules by Attorney A.

            If Attorney A’s representation of his client is clearly incompetent and a violation Rule 1.1, Attorney B must report Attorney A to the State Bar or Court having jurisdiction, if the violation raises a substantial question about the lawyer’s fitness to practice law. If a violation of the Rules has occurred, Attorney B must report to the State Bar. A mere reporting of Attorney A to LAP in this situation does not satisfy the reporting requirement.

            Finally, conduct that is disclosed in a LAP support group which would otherwise be reportable to the State Bar is confidential and is not reportable to the State Bar under Rule 8.3. 2001 FEO 5.

Note: The Ethics Committee meets in January 2004. The following three proposed formal Ethics Opinions may at that time be revised or adopted. At the time of the writing of this paper, the opinions were merely proposed.

            B. Proposed 2003 FEO 11 – Duty of Departed Lawyer When Dividing Fee With Former Firm

            Attorney X worked for ABC Law Firm when she began the representation of a client in a workers’ compensation claim. Prior to the resolution of the claim, Attorney X left the firm to join another firm. The client chose to continue to be represented by Attorney X. The Industrial Commission issued an Order releasing ABC Law Firm from further representation and acknowledging its entitlement to a portion of any legal fee ultimately awarded in the case. Client’s workers’ compensation case was settled and an Order by the Industrial Commission approved the settlement and the total attorney’s fee to be paid from the settlement. The settlement proceeds have not yet been delivered to Attorney X for disbursement but separate checks for the client’s settlement proceeds and the approved legal fee will be sent to Attorney X.

            Attorney X is required to notify ABC Law Firm that the Commission has awarded a legal fee in the case and the amount of that fee. Rule 8.4(c)(d) requires lawyers to deal honestly with each other and to comply with the law and court orders. When the check for the legal fee is received by Attorney X, it should be deposited into her trust account pursuant to Rule 1.15-2(g) requiring that when funds belonging to the lawyer are received in combination with funds belonging to the client or other persons, all the funds shall be deposited intact. Client’s consent does not need to be obtained prior to disbursing the legal fees in the trust account if the Industrial Commission has already approved the total amount of legal fees and client has no liability to ABC Law Firm for the fee. The dispute is between ABC Law Firm and Attorney X. If client is liable to ABC Law Firm for litigation expenses or to a provider for medical expenses, Attorney X should advise client of these expenses and may withhold the funds to pay medical liens as provided in 2001 FEO 11. (This opinion is discussed elsewhere in this paper).

            Attorney X may determine the amount of her share of the legal fee and disburse that amount to herself without the specific consent of ABC Law Firm, if Attorney X acting in good faith determines that her entitlement to a specified portion of the legal fee is undisputed. Disputed portions of the legal fee must remain on deposit in the trust account until the dispute with ABC Law Firm is resolved.

            C. Proposed 2003 FEO 13 – Filing Suit After The Statute Of Limitations Has Run

            This proposed opinion holds that an attorney may file a time-barred claim on behalf of a client whether or not the defendant is unavailable and can only be served by publication. Such a suit is not frivolous as the expiration of the statute of limitations does not affect the validity of the claim and does not devest the court from having jurisdiction. Instead the statute of limitations is merely an affirmative defense to an otherwise enforceable claim and must be pled by the defendant in its answer or it is waived.

            D. Proposed 2003 FEO 17 – Post-Hearing Submission Of Ex-Parte Written Communications To A Judge

            This proposed opinion holds that an attorney may only provide a judge with additional authority post-hearing if the communication is permitted by the rules of the tribunal and a copy of the writing is furnished simultaneously to opposing counsel. The ethics opinion discusses in detail 98 FEO 13, which is discussed elsewhere in this paper. The opinion goes on to state that if the local rules would permit the submission of authority subsequent to arguments in open court, then it is not unethical to do so. A copy of the writing must be furnished to opposing counsel simultaneously, however. Allowing the written submission of additional authority and supporting arguments promotes the interest and informed decision-making of the tribunal. Requiring the writing to be copied to opposing counsel gives opposing counsel the opportunity to respond in time and reduces the likelihood that the ex-parte communication will result in unfair advantage to one party. Notwithstanding the above, the attorney making the ex-parte submission post-hearing should include only that authority which he in good faith believes is decisive, on point, and not otherwise cumulative in nature. The Workers’ Compensation Rules of the North Carolina Industrial Commission do not provide for post-hearing ex-parte communication following the closure of the record. The Rules of Appellate Procedure provide in Rule 28(g) that additional authorities discovered by a party after filing his brief may be brought to the attention of the court by filing a memorandum thereof…and serving copies upon all other parties. It further notes that the memorandum may not be used as a reply brief or for additional argument but shall simply state the issue to which the additional authority applies and provide a full citation of the authority. Although it is not an official policy of the Industrial Commission, considering the informal nature of the process and the fact that the record does not close until after the hearing, such memorandum of additional authorities would probably be acceptable following closure of the record and would most likely not be a violation of the ethical rules.

IV. Diligence

            “A lawyer shall act with reasonable diligence and promptness in representing a client”. Rule 1.3. Comment 2 of this section recognizes that a client’s interest may often be adversely affected by the passage of time or the change of conditions and that the adverse effects may range from the client’s legal position being destroyed to causing the client needless anxiety and undermining his confidence in the lawyer. Comment 5 further explains a breach of the duty of diligence and promptness by indicating that “a pattern of delay, procrastination, carelessness, and forgetfulness regarding client matters indicates a knowing or reckless disregard for the lawyer’s professional duty.” The comment goes to pains to note that a pattern of negligent conduct is not excused by burdensome caseload or inadequate office procedures. The lawyer’s equivalent to -- the dog ate my homework yet again-- is not acceptable and is a violation of the duty of diligence.

            Comment to Rule 1.3 indicates that conduct sufficient to warrant the imposition of professional discipline is typically characterized by the element of intent or scienter manifested when a lawyer knowingly or recklessly disregards his or her obligations. Breach of the duty of diligence sufficient to warrant professional discipline occurs when a lawyer consistently fails to carry out the obligations that the lawyer has assumed for his or her clients. A pattern of delay, procrastination, carelessness and forgetfulness regarding client matters indicates a knowing or reckless disregard for the lawyer’s professional duty. For example, a lawyer who habitually misses filing deadlines and court dates is not taking his or her professional responsibility seriously. A pattern of negligent conduct is not excused by a burdensome caseload or inadequate office procedures.

V. Fees

Note: Plaintiff’s counsel should refer to the previous discussion of amended Rule 1.5(c) and all counsel should refer to Rule 1.5(e) regarding fee splitting.

Rule 1.5 provides that a lawyer “shall not enter into an agreement for, charge, or collect an illegal or clearly excessive fee”. The issue arises frequently at the Industrial Commission in fee requests in uncontested death cases. The rule provides some general guidance in the area of whether or not a fee is excessive. A fee is clearly excessive when “after a review of the facts, a lawyer of ordinary prudence experienced in the area of law involved would be left with a definite and firm conviction that a fee is clearly excessive.” Since that criteria is sufficiently mushy as to change with each and every lawyer of “ordinary prudence”, the rule lists several factors to be considered in determining whether a fee is excessive: 1) the time and labor required, the novelty and difficulty of the questions involved and the skill requisite to perform the legal service properly; 2) the likelihood that the acceptance of the particular employment will preclude other employment by the lawyer; 3) the fee customarily charged in the locality for similar legal services; 4) the amount involved and the results obtained; 5) the time limitations imposed by the client or the circumstances; 6) the nature and length of the professional relationship with the client; 7) the experience, reputation and ability of the lawyer; and 8) whether the fee is fixed or contingent. It is also to be noted that Rule 1.5(f) requires that any lawyer having a dispute with a client over a fee for legal services must make reasonable efforts to advise the client of the existence of the North Carolina State Bar’s program of fee dispute resolution at least 30 days prior to initiating legal proceedings to collect the disputed fee, even if the fee is not disputed but plaintiff has merely failed to pay, and to participate in good faith in the fee dispute resolution process, if the client submits a proper request for fee arbitration.

RPC 35 touches on the issue of whether a contingency may be charged for collection of medical fees in a non-workers’ compensation context. RPC 35 deals with the issue of whether or not a lawyer may enter into a contingency fee to collect medical expenses under the provisions of a liability insurance contract which provides for the payment of the insured’s medical expenses up to a certain amount without regard to fault if there is no dispute as to the validity of the medical bill. The analysis in this case is that there is generally no justification for high fees where there is no risk of nonpayment. Therefore, in order for a contingency to be reasonable, and therefore permissible, there must exist at the time the agreement is made some real uncertainty as to whether there will be a recovery. The opinion goes on to state that it is not unethical for the attorney to make some reasonable charge for services rendered in regard to the collection of such claims.

RPC 174 in a related opinion rules that a legal fee for the collection of med-pay which is based upon the amount collected is unreasonable. Unless there exists a significant risk that a med-pay claim will not be paid, it is unreasonable for a lawyer to charge a fee for collecting med-pay which is not related to the cost to the lawyer of providing this service. A fee structure which is a sliding fee based upon the amount of the claim and not upon the cost to the lawyer to provide this service is unreasonable and a violation of Rule 2.6(a). RPC 174 also references RPC 35.

RPC 190 rules that a lawyer who has agreed to bill a client on the basis of hours expended does not fulfill his or her ethical duties if he or she bills the client for more time than was actually expended on the client’s behalf. Thus, a lawyer who has agreed to bill a client on the basis of hours expended may not bill the client on the same basis for reused work product. In this inquiry the question was whether research originally prepared for another client could be reused and the current client billed for the research.

The comment to Rule 2.6 of the Rules regulating legal fees indicates “once a fee contract has been reached between attorney and client, the attorney has an ethical obligation to fulfill the contract and represent the client’s best interest regardless of whether he has struck an unfavorable bargain. A lawyer also has a duty to deal honestly with clients pursuant to Rule 1.2(c). The comment indicates that implicit in an agreement with a client to bill at an hourly rate for hours expended on the client’s behalf is the understanding that for each hour of work billed, an hour’s worth of work was actually performed. If a lawyer uses reused work product, the lawyer would be engaging in dishonest conduct. The opinion does allow the lawyer to bill at an hourly rate for the time expended in tailoring the old work product to the needs of the new client. It is not unethical to charge for the value of reused work product if the original agreement or any subsequent fee agreement includes the express understanding that the client will be charged a reasonable fee which is not based upon hourly compensation.

RPC 196 rules that a law firm may not charge a clearly excessive fee for legal representation even if the legal fee may be recovered from an opposing party. If a law firm collects more than a fee that has been determined to be reasonable after taking into account the factors set forth in Rule 2.6(b) as discussed above, a law firm would be charging and collecting an unethical and excessive fee whether the fee is collected from the client or an opposing party. In addition, if the law firm inflates its fee in a request to a court for the recovery of legal fees, the law firm would be engaging in misrepresentation of the actual fees incurred for that particular action and would be in violation of Rule 1.2(c) which prohibits a lawyer from engaging in conduct involving dishonesty, deceit or misrepresentation.

Collection of legal fees in a workers’ compensation case must go through an additional hurdle beyond the ethical constraints applied by Rule 1.5. No fee may be collected by a lawyer in a workers’ compensation case unless that fee has been approved by the North Carolina Industrial Commission. N.C.G.S §97-90.

RPC 141 indicates that an attorney’s contingent fee in a case resolved by a structured settlement should, if to be paid in a lump sum, be calculated in terms of the settlement’s present value. The ethics committee went to great lengths to indicate that the prohibition on collecting an illegal or clearly excessive fee requires an examination of all relevant facts and circumstances relating to the fee and the legal services. The committee goes on to state that it has generally refrained from adopting per se rules prohibiting certain types of agreements or methods of computation. However, where an attorney is entitled to receive a contingency fee calculated as a percentage of any amount recovered and arrangements are made for the payment of sums over a prolonged period of time in the form of a structured settlement, the attorney may collect immediately only the prescribed percentage of the total settlement reduced to its present value.

VI. Representation

A. Incompetent Client

            Rule 1.14 addresses the problem presented when a client’s ability to make an adequately considered decision in connection with the representation is impaired whether because of minority, mental disability or for some other reason. The rule instructs a lawyer as far as reasonably possible to maintain a normal client-lawyer relationship with the client under these circumstances. However, it provides that a lawyer may seek the appointment of a guardian or take other protective action with respect to the client when the lawyer reasonably believes that the client cannot adequately act in the client’s own interest.

The comments to Rule 1.14 recognize that a client may have intermediate degrees of competence and that while a guardian or other representative may be necessary for the legal representation of a client, the lawyer maintains the responsibility to communicate with the person under the disability as much as possible. RPC 157 provides that an attorney may seek the appointment of a guardian over a client’s objection if it appears to be reasonably necessary to protect the client’s interest, i.e., the client is in the attorney’s opinion, not competent to handle his affairs in relation to the representation and the client’s actions in regard to the matters involved in the representation are detrimental to the client’s own interest. However, in establishing the grounds for guardianship, the attorney may disclose only his or her belief that there exists a good faith basis for the relief requested and may not disclose the confidential information obtained from the client which led her to conclude that the client is incompetent except as required or permitted by Rule 4(c).

RPC 109 provides that a lawyer may not represent parents as guardians ad litem for their injured child and represent parents as individuals concerning their related tort claim after having received a joint settlement offer which is insufficient to fully satisfy all claims. The opinion indicates that the attorney may not represent conflicting interests which can not be reconciled under Rule 5.1 and that the parents have a conflict of interest between their personal claims and the claims of the child for whom they are fiduciaries. RPC 123 addresses the same issue in a broader way but does not contradict the advice given in response to RPC 109. This opinion indicates that a lawyer may represent parents and an independent guardian ad litem for their child in related tort claims under certain circumstances. In this case involving the alleged malpractice of a physician and the child’s claim for negligence as well as the parents claim for negligent infliction of emotional distress, the opinion indicates that an attorney may represent the parents and the child in negotiating with the physician or his insurer prior to the initiation of litigation and possibly to the point of establishing negligence. However, upon the receipt of settlement offers potential problems of conflict of interest would arise. RPC 251 delves further into this question stating that a lawyer may represent multiple claimants in a personal injury case, even though the available insurance proceeds are insufficient to compensate all claimants fully, provided each claimant or his legal representative gives informed consent to the representation and the lawyer does not advocate against the interest of any client in the division of the insurance proceeds.

RPC 163 indicates that an attorney may seek the appointment of an independent guardian ad litem for a child whose guardian ad litem has an obvious conflict of interest in fulfilling his fiduciary duties to the child. It further raises the question whether when the client is laboring under a disability the lawyer has an affirmative duty to request an independent guardian ad litem.

B. Fraudulent Or Lying Client

A lawyer shall not represent a client or where representation has commenced, shall withdraw from the representation of the client if the representation will result in a violation of law or the Rules, the lawyer reasonably believes that the client is bringing the legal action, conducting the defense or asserting a position for the purpose of harassing or maliciously injuring any person, the lawyer’s physical or mental condition materially impairs the lawyer’s ability to represent, or the lawyer is discharged. In these situations, Rule 1.16(a) requires the lawyer to withdraw or refuse to represent the client. Subsection (b) provides that a lawyer may withdraw from representation if 1) he may do so without material adverse affect on the client, 2) the client knowingly and freely assents to the termination of the representation, 3) the client persists in a course of action involving the lawyer’s services that the lawyer reasonably believes is criminal or fraudulent, 4) the client insists upon pursuing an objective that the lawyer considers repugnant, imprudent or contrary to the advice and judgment of the lawyer, 5) the client has used the lawyer’s services to perpetuate a crime or fraud, 6) the client fails substantially to fulfill an obligation to the lawyer regarding the lawyer’s services and has been given reasonable warning that the lawyer will withdraw unless the obligation is fulfilled, 7) the representation has been rendered unreasonably difficult by the client, 8) the representation will result in an unreasonable financial burden to the lawyer, 9) the client insists upon presenting a claim or defense that is not warranted under existing law and cannot be supported by a good faith argument for an extension, modification or reversal of existing law, or 10) for other good cause. Rule 1.16 further requires that when permission for withdrawal from representation is required by the rules of the tribunal, as in practice before the Industrial Commission (Workers’ Compensation Rules of the North Carolina Industrial Commission, Rule 614(3)), a lawyer shall not withdraw from the representation before that tribunal without the permission of the tribunal. Finally, upon termination of representation for whatever reason and under whatever circumstances, a lawyer must take steps to the extent reasonably practicable to protect the client’s interest including giving reasonable notice and surrendering papers.

Often the more serious ethical conflicts are those involving client confidentiality and the knowledge that a client has or is attempting to commit criminal or fraudulent behavior using the lawyer’s services. While it is not necessarily a real solution to the problem, under the Rules, the lawyer must withdraw from representation of the client if the client insists on that course of conduct or refuses to allow the lawyer to disclose the information. A lawyer is not obligated to decline to represent or withdraw simply because the client suggests such a course of conduct, but must if the client insists on pursuing the conduct. Comment 3 of Rule 1.16 indicates that if permission for withdrawal is required by a tribunal and that tribunal requires an explanation for the withdrawal, the lawyer is bound to keep confidential the facts that would constitute such an explanation, but the lawyer may state that professional considerations require termination of the representation. Where an attorney learns prior to trial that his client intends to commit perjury or participate in the perpetuation of a fraud upon the court, he must withdraw from the representation of the client, seeking leave of the court if necessary.

            C. Disappearing Client

RPC 223 gives assistance to the lawyer whose client has disappeared. The opinion rules that when a lawyer’s reasonable attempts to locate a client are unsuccessful, the client’s disappearance constitutes a constructive discharge of the lawyer requiring the lawyer’s withdrawal from representation. The reasoning of this opinion is that constructive discharge is essentially the same as if a client affirmatively discharges his lawyer. Therefore, the attorney must withdraw from representation. It must be noted, however, that upon the withdrawal from representation because of constructive discharge, the attorney may not file a complaint on behalf of that client even to stop the running of the statute of limitation. Once the lawyer is unable to locate the client after reasonable efforts to do so, the lawyer must withdraw from representation without taking any further action on behalf of the client.

D. Discharging Client

CPR 300 provides that an attorney, after being discharged by his or her client, cannot discuss the client’s case with the client’s new attorney without the client’s consent. This would be a violation of Rule 1.6 which requires that a lawyer may not reveal information acquired during the professional relationship with a client unless the client gives informed consent, the disclosure is impliedly authorized in order to carry out the representation or the disclosure is specifically permitted by Paragraph (b) of the rule.

VII. Good Faith

Rule 3.1 provides that a lawyer shall not bring or defend a proceeding or assert or controvert an issue therein unless there is a basis in law and fact for doing so that is not frivolous which includes a good faith argument for an extension, modification or reversal of existing law. It should be noted that the language in this rule is very similar to Rule 11 of the North Carolina Rules of Civil Procedure. Rule 3.2 requires that a lawyer make reasonable efforts to expedite litigation consistent with the interest of his client. CPR 321 indicates that it is improper for an attorney to file motions and pleadings for the mere purpose of delaying the proceedings. Comment 1 of Rule 3.2 notes that dilatory practices bring the administration of justice into disrepute. Realizing financial or other benefit from otherwise improper delay in litigation is not a legitimate interest of the client which may be advanced. Comment 1 also indicates that it is improper for a lawyer to routinely fail to expedite litigation for the convenience of advocates even if tolerated by bench and bar.

VIII. Candor

            Rule 3.3 states that a lawyer shall not knowingly: “1) make a false statement of material fact of law to a tribunal or fail to correct a false statement of material fact or law previously made to the tribunal by the lawyer; 2) fail to disclose to the tribunal legal authority in the controlling jurisdiction known to the lawyer to be directly adverse to the position of the client and not disclosed by opposing counsel; or 3) offer evidence that the lawyer knows to be false. If a lawyer, the lawyer’s client, or a witness called by the lawyer, has offered material evidence and the lawyer comes to know of its falsity, the lawyer shall take reasonable remedial measures, including, if necessary, disclosure to the tribunal. A lawyer may refuse to offer evidence, other than the testimony of a defendant in a criminal matter, that the lawyer reasonably believes is false”. The rule goes on to indicate that this affirmative duty continues to the conclusion of the proceeding and applies even if compliance requires disclosure of information otherwise protected by Rule 1.6. Rule 3.3(c).

            The comments under Rule 3.3 note that an assertion purporting to be on a lawyer’s own knowledge, for example in an affidavit or in a statement in open court, may only be made when the lawyer knows the assertion is true or believes it to be true on the basis of a reasonably diligent inquiry. Candor toward the tribunal also requires a lawyer not to base legal argument on a knowingly false representation of the law, and fulfillment of the duty to disclose directly adverse authority in the controlling jurisdiction which has not been disclosed by the opposing party. While a lawyer is not required to make a disinterested exposition of the law, he must at least acknowledge directly adverse authority.

            When a lawyer knows, not believes, that evidence which is false is going to be provided by a person who is not his client, the lawyer must refuse to offer it without regard to her client’s preferences. Rule 3.3(b). When a lawyer finds out that such information has been given to the tribunal, she must promptly reveal the fraud to the tribunal. When the false information is offered by the client, however, the lawyer’s duty of confidentiality to the client and candor to the court come in to conflict. In this circumstance, the lawyer should either persuade the client not to offer the information, or if the information has been offered, to disclose the false character of the information. If the lawyer questions a client, knowing that the client intends to offer false information, the lawyer should not question the client on these matters. If the lawyer is not successful in remonstrating with the client, which is often the case in the real world, the lawyer should withdraw if that would remedy the situation. According to Rule 3.3, Comment 10 if a withdrawal will not remedy the situation or is impossible, the advocate may make disclosure to the Court. Notice that the word used here is “may” and not “shall”. RPC 203 holds that the dismissal of an action alone is not sufficient to rectify the perjury of a client in a deposition, and the lawyer must demand that the client inform the opposing party of the falsity of the deposition testimony, or if the client refuses, withdraw from representation. It is reasoned that information contained in the deposition, which is untruthful, may continue to be relied upon in other actions. If a lawyer reasonably believes testimony is false, he may refuse to offer it. If the lawyer only believes that the testimony is false, without actual knowledge, the refusal is permissive.

99 FEO 16 rules that a lawyer may not participate in the presentation of a consent judgment to a court if the lawyer knows that the consent judgment is based upon false information. The attorney must try to persuade the client to remedy the situation by disclosing the true information. If the client refuses, the attorney must withdraw from the representation. The attorney should also inform the client if she presents the consent judgment on her own or through other counsel, the attorney has the discretion to make disclosure to the court or opposing counsel if necessary because the client used his services to perpetuate a fraud on the court. Notice that after the attorney’s withdrawal, the attorney has discretion to make the disclosure and “may” but not necessarily “shall” make the disclosure. In particular, in the case of a workers’ compensation claim, presenting forms or pleadings to the Commission or relying on them when those forms or pleadings indicate that a party has or has not returned to work or that certain payments have or have not been paid, if that information is known or should be known to be untrue, may cause a lawyer to run afoul of Rule 3.3 of the Rules.

IX. Zealousness

            Rule 3.4 indicates that a lawyer shall not unlawfully obstruct another party’s access to evidence or unlawfully alter evidence, falsify evidence or counsel another to falsify evidence, knowingly disobey or advise a client to disobey a ruling, make frivolous discovery requests or fail to make reasonably diligent efforts to comply with proper discovery, etc. While this rule is not always followed, it is generally known and we are not surprised to hear it evoked. However, Rule 3.4(e) provides that a lawyer shall not “in trial, allude to any matter that the lawyer does not reasonably believe is relevant or that will not be supported by admissible evidence, assert personal knowledge of facts and issues except when testifying as a witness, ask an irrelevant question that is intended to degrade a witness, or state a personal opinion as to the justness of a cause, the credibility of a witness, the culpability of a civil litigant, or the guilt or innocence of an accused.” Comments 4 and 5 of this section indicate that “while a lawyer may argue on an analysis of the evidence for any position or conclusion with respect to any of these matters, a personal opinion of the lawyer as to the justness of the cause or the credibility of the witness or the culpability of a civil litigant is prohibited”. This rule is violated regularly in courtrooms.

X. Respect for the Court

            A. Decorum

Rule 3.5 deals with impartiality and decorum of the tribunal. Rule 3.5(a)(4) indicates that a lawyer shall not engage in conduct intended to disrupt a tribunal. This includes failing to comply with known and local customs of courtesy or practice, engaging in undignified or discourteous conduct that is degrading to a tribunal or intentionally or habitually violating any established rule of procedure or evidence. Comment 9 indicates that an advocate’s function is to present evidence and argument so that a cause may be decided according to law. An advocate must refrain from abusive or obstreperous conduct. Even in the case of abuse by a judge, a lawyer should avoid reciprocation. “The judge’s default is no justification for similar dereliction by an advocate. An advocate can present the cause, protect the record for subsequent review, and preserve professional integrity by patient firmness no less effectively than by belligerence or theatrics.” In other words, a lawyer must never engage in less than professional behavior.

            B. Ex Parte Communications

Another cornerstone of professional responsibility is the principle that a lawyer shall not seek to influence a judge. Rule 3.5(a)(1). A lawyer shall not communicate ex parte with a judge except 1) in the course of official proceedings, 2) in writing, if a copy of the writing is furnished simultaneously to the opposing party, 3) orally, upon adequate notice to the opposing party or 4) as otherwise permitted by law. In an adversarial proceeding a lawyer shall not communicate with a judge relative to a matter pending before, or which is to be brought before, a tribunal over which the judge presides in circumstances which might have the effect or give the appearance of granting undue advantage to one party. Rule 3.5.

RPC 237 rules that a lawyer may not communicate with a judge before whom a proceeding is pending to request an ex parte order unless opposing counsel is given adequate notice or unless authorized by the opposing lawyer. A lawyer may not communicate the merits of a cause with a judge before whom the proceeding is pending, if the communications will occur outside official proceedings. If communications are in writing, that communication must promptly be delivered to opposing counsel or the opposing party. Promptly would generally mean delivery by the same method and at the same time as that delivered to the judge.

97 FEO 3 rules that a lawyer may engage in an ex parte communication with a judge regarding a scheduling or administrative matter only if necessitated by the administration of justice or exigent circumstances and diligent efforts to notify opposing counsel have failed. In this opinion, it is specifically noted that the situation must be exigent and diligent efforts to notify opposing counsel have failed. Waiting until the last minute and failing to notify opposing counsel means that there has been an ethical violation even if the matter regards scheduling or administrative matters.

97 FEO 5 rules that a lawyer must give the opposing counsel a copy of a proposed order simultaneously with the lawyer’s submission of the proposed order to a judge. This opinion makes specific note that delivery of a document to opposing counsel five days after its submission to a judge would not be prompt under the standard and fails to meet the requirement of simultaneous delivery under Rule 3.5. The opinion notes that “to comply with Rule 3.5, a lawyer must hand deliver a copy of the written communication to the opposing lawyer at the same time or prior to the time that the written communication is hand delivered to the judge, or if the written communication is mailed to the judge, the lawyer must put the written communication in the mail for delivery to opposing counsel at the same time or before it is placed in the mail for delivery to the judge”.

98 FEO 12 sets forth the disclosures a lawyer must make to the judge prior to engaging in an ex parte communication. In a case where a lawyer seeks an ex parte communication with a judge to request a continuance and has made several unsuccessful attempts to notify the opposing counsel, she may request a continuance in an ex parte communication with the judge provided she fully informs the judge of the reason for her ex parte communication and gives the judge an opportunity to determine whether he will hear the matter ex parte. This rule indicates that those disclosures should include that the lawyer is about to engage in an ex parte communication, why it is necessary to speak to the judge ex parte, the authority that permits the ex parte communication and the status of attempts to notify opposing counsel.

98 FEO 13 deals with written communications with a judge or judicial official and is based upon an inquiry to the ethics committee regarding communication with a deputy commissioner in a workers’ compensation case. In this case an attorney wrote to opposing counsel regarding discovery disputes, medical treatment and examination of the employee along with other matters. The substance of the letter implied that opposing counsel had engaged in improper conduct by communicating with an examining physician and failing to respond to discovery. This letter was copied to the deputy commissioner scheduled to hear the case. (The rule specifically indicates that the term judicial official applies to commissioners and deputy commissioners of the Industrial Commission). This opinion indicates that Rule 3.5(a)(3) and Rule 8.4(d) must be read together. The opinion states that “the submission to a tribunal of formal written communications, such as pleadings and motions, pursuant to the tribunal’s rules of procedure, does not create the appearance of granting undue advantage to one party. However, informal ex parte written communications, whether addressed directly to the judge or copied to the judge as in this inquiry, may be used as an opportunity to introduce new evidence, to argue the merits of the case, or to cast the opposing party or counsel in a bad light. To avoid the appearance of improper influence upon a tribunal, informal written communications with a judge or other judicial officials should be limited to the following: 1) written communications, such as a proposed order or legal memorandum, prepared pursuant to the court’s instructions; 2) written communications relative to emergencies, changed circumstances, or scheduling matters that may affect the procedural status of a case such as a request of a continuance due to the health of a litigant or an attorney; 3) written communications sent to the tribunal with the consent of the opposing lawyer or opposing party if unrepresented; and 4) any other communication permitted by law or the rules or written procedures of the particular tribunal”.

This rule is particularly important in practice before the Industrial Commission as the informal nature of the process and the acceptance of letter motions lends itself to a blurring of the lines with regard to allowable communication. However, any communication which accuses another party of bad acts, tends to introduce new evidence or tends to show the opposing party in a negative light shall not be given to the deputy commissioner or commissioner or should be sent in a formal motion subject to the applicable rules of service.

2001 FEO 15 rules that a lawyer may not communicated ex parte with a judge in reliance upon the communication being “permitted by law” unless there is a statute or case law specifically and clearly authorizing communication or proper notice is given to the adverse party or counsel.

XI. Conflicts

Multiple Representation of Claimants for Workers’ Compensation Death Benefits

2001 FEO 6

This opinion examines when a lawyer has a conflict of interest in representing various family members on claims for a deceased employee’s workers’ compensation death benefits. The issue of whether or not a spouse who is separated from the decedent has a conflict of interest with any children of the decedent was not considered. It was the opinion of the ethics committee that this was such a clear conflict of interest that the issue need not be addressed.

In Inquiry One a worker was fatally injured in a work-related accident covered under the Workers’ Compensation Act. At the time of the worker’s death, he was married to Wife #2 who has two children from a previous marriage (stepchildren), the worker had two children of his own from his first marriage (worker’s children), and Wife #2 and worker also had one child together (joint child). All of the children are under 18 years of age. The opinion rules that one attorney cannot represent the interest of worker’s children and worker’s stepchildren as the interests are directly in conflict and such a representation is prohibited under Rule 1.7(a). The attorney also may not ask the guardian ad litem for worker’s children to consent to the conflict of interest because it is so clearly a conflict of interest which may not be resolved.

Inquiry Two asks whether Wife #2 and the worker’s stepchildren and the joint child of the marriage of Wife #2 and the decedent may be represented by the same lawyer. A single attorney may represent Wife #2 and her own children from her first marriage (the stepchildren) or may represent Wife #2 and the joint child of her marriage to the decedent. Either way it is assumed that Wife #2 would receive the benefits payable to these children during their minority if they reside with her, and therefore, that they and Wife #2 have a common economic interest. However a single attorney may not represent the stepchildren and the joint child of the marriage. The interests of the stepchildren and the joint child are opposed because the joint child has an interest in maximizing the benefits payable by eliminating the claims of the stepchildren on the basis that they were not substantially dependent on the worker at the time of his death. Furthermore, once the two stepchildren are emancipated they would receive compensation directly and that compensation would not be made to the household.

XII. Good Behavior

A. Respect the Rights of Third Persons

            Rule 4.4 provides that the attorney should respect the rights of third persons. The zealous representation of a client does not mean that a lawyer may use means that have no substantial purpose other than to embarrass, delay or burden a third person or use methods of obtaining evidence that violate the legal rights of such a person. This rule further requires that a lawyer who receives a writing and knows or reasonably should know that the writing was inadvertently sent should promptly notify the sender.

            RPC 252 rules that a lawyer in receipt of materials that appear on their face to be subject to the attorney-client privilege or otherwise confidential which were inadvertently sent to the lawyer by the opposing party or opposing counsel, should refrain from examining the materials and return them to the sender. In this case following the failure of initial settlement discussions, the plaintiff’s attorney filed suit on behalf of the plaintiff. The insurance company hired an attorney to defend it and the defendant in the lawsuit. The adjuster for the insurance company erroneously sent the company’s claim file to the plaintiff’s attorney. This file was sent by certified mail, return-receipt requested addressed to the plaintiff’s attorney. The cover letter was also addressed to the plaintiff’s attorney. However, the letter salutation read “Dear Attorney X”, the attorney hired by the insurance company. A copy of the letter to the actual defendant from the adjuster was also enclosed in the file. This letter incorrectly informed the defendant that he would be defended by the plaintiff’s attorney. In addition to a photo of the plaintiff’s vehicle, the plaintiff’s medical records and plaintiff’s attorney’s demand letter, the file included a “claim diary” that the plaintiff’s attorney read and believes contains prima facia evidence of an unfair and deceptive trade practice by the insurance company. Plaintiff’s attorney sent a copy of the file to the adjustor and to the defense counsel. Defense counsel demands the return of the original file. The opinion held that plaintiff’s counsel does have a duty to return the file to the insurance company. The opinion further states that from the cover letter it can be readily ascertained that the accompanying materials were subject to the attorney-client privilege or otherwise confidential and were sent to the plaintiff’s attorney inadvertently. Upon realizing that the materials were not intended for his eyes, the opinion indicates that plaintiff’s attorney should have refrained from reviewing the file materials, notified the opposing counsel of their receipt and followed opposing counsel’s instructions as to the disposition of the materials. The opinion further held that the receiving attorney could not use the substance of the materials inadvertently sent to him to the advantage of his client. The opinion went on to state that a lawyer who is the recipient of an inadvertent disclosure of written materials by an opposing party or opposing counsel is required to discontinue reading the materials as soon as the lawyer realizes that the materials may be subject to the attorney-client privilege of others or otherwise contain confidential communications involving an attorney and the materials were not intended for his or her eyes. The opinion held that the duty was the same whether the file was inadvertently sent by the claims adjuster or by defense counsel.

B. Professional Courtesy

            While a lawyer shall abide by a client’s decisions concerning the objectives of representation and shall consult with the client as to the means by which they are to be pursued, a lawyer does not violate the Rules by acceding to reasonable requests of opposing counsel that do not prejudice the rights of a client, by being punctual and fulfilling all professional commitments, by avoiding offensive tactics or by treating with courtesy and consideration all persons involved in the legal progress. Rule 1.2(a)(2).

            RPC 208 provides that avoiding offensive tactics and treating others with courtesy includes not taking advantage of the opposing party or the opposing counsel’s failure to respond to a notice of hearing when there has been no prior lack of diligence or responsiveness on the part of the opposing counsel.

            RPC 212 rules that a lawyer may contact an opposing lawyer who failed to file an answer on time in order to remind the other lawyer of the error and to give the other lawyer a last opportunity to file the pleading. Such conduct the opinion states “is not unethical but rather illustrates the level of professional courtesy and consideration that should be encouraged among the members of the Bar”. Rule 1.2 indicates that a lawyer does not violate the duty to represent a client zealously by avoiding offensive tactics or by treating with courtesy and consideration all persons involved in the legal process. A lawyer is not required to pursue objectives or employ means simply because a client may wish that a lawyer do so. The Rules do not require the client’s consent prior to notifying the opposing lawyer.

            It is to be noted, however, that if a lawyer comes to know or reasonably should know that a client expects assistance not permitted by the Rules or other law or if the lawyer intends to act contrary to the client’s instructions, the lawyer must consult with the client regarding the limitations on the lawyer’s conduct. Rule 1.2 Comment 14.

C. Advisor

Rule 2.1 indicates that in representing a client, a lawyer shall exercise independent, professional judgment and render candid advice. In rendering advice, a lawyer may refer not only to law but also to other considerations such as moral, economic, social and political factors that may be relevant to the client’s situation. Comment 1 of this section indicates that a client is entitled to straightforward advice expressing the lawyer’s honest assessment. Legal advice often involves unpleasant facts and alternatives that a client may be disinclined to confront. In presenting advice, a lawyer endeavors to sustain the client’s morale and may put advice in an acceptable a form as honesty permits. However, a lawyer should not be deterred from giving candid advice by the prospect that the advice will be unpalatable to the client. This rules seems to clearly indicate that a lawyer has an obligation not merely to tell a client what he or she wants to hear but to inform the client of the reality of the law, the potential of success of a claim or defense and the impact of certain positions on the client’s case as a whole.

XIII. Misconduct

            Without regard to the “mays” or “shalls” of the 2003 Revised Rules of Professional Responsibility, a lawyer is prohibited from engaging in misconduct. Rule 8.4 states that it is professional misconduct for a lawyer “to violate or attempt to violate the rules of professional conduct or knowingly assist or induce another to do so or to do so through the acts of another; to commit a criminal act that reflects adversely on the lawyer’s honesty, trustworthiness, or fitness as a lawyer in other respects; to engage in conduct involving dishonesty, fraud, deceit or misrepresentation; to engage in conduct that is prejudicial to the administration of justice; to state or imply an ability to influence improperly a government agency or official; to knowingly assist a judge or judicial officer in conduct that is a violation of applicable rules of judicial conduct or other law; or to intentionally prejudice or damage his or her client during the course of the professional relationship”.


            This paper discusses ethics for the workers’ compensation practitioner within the context of practice before the North Carolina Industrial Commission. The discussion that follows reflects the opinions of the author only. The author's opinions do not have weight as legal authority or practice in specific cases before the Industrial Commission and specifically may not represent the ultimate practice before any Deputy Commissioner of the Industrial Commission.

            This paper is being published only as a reference point for information and reflects the commitment of the Industrial Commission to the discussion of the law relative to its quasi-judicial function.

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