November 1949

CONFLICTING INTEREST—EMPLOYMENT—INTERMEDIARIES—An attorney for an insurance company may not act at attorney for claimants in a friendly suit by tire claimants against the company. He may prepare the necessary papers for the adjustor. He may suggest names of attorneys to represent claimants, provided he advises the adjustor to explain to the claimants that they will need an attorney, allow them to make their own selection and make no recommendation unless the claimants request.

Canons 632. A.B.A. Canons 6, 35.


"What should an attorney do when he is asked by an insurance company to handle a friendly suit in order to effectively dispose of a minor’s claims for personal injuries, when neither the minor nor his father has consulted an attorney? In other words, can you in such case arrange with an attorney to represent the minor arid his next friend, or can you properly do no more than to communicate with the minor and his father and instruct him that he will have to have an attorney, ask him to select an attorney, and acquiesce in his selection, running the risk of the attorney advising against the settlement or charge for his services a substantial part of the amount of the agreed settlement? If one of these agreements for settlement should get out of hand the insurance company will hold you responsible and you lose a client."


The committee is of the opinion that no Canon, either of this Bar, or of the American Bar Association, directly pertain to, or covers, the foregoing question, in the event; Texas Canons 6 and 32 (A.B.A. Canons 6 and 35) are not violated. We are of the opinion that the attorney for the insurance company (1) studiously avoid having any contact at with the minor and his parents, (2) should require the adjuster to make all the necessary arrangements, (3) may prepare the necessary papers and turn them over to the adjuster for submission to the minor and his parents, (4) may suggest the names of two or three attorneys who may be approached in regard to representing the plaintiffs, advising the adjuster, however, that he should carefully explain to the claimants that they will need the services of an attorney and give them the opportunity of making their own selection, and make no recommendation unless requested to do so by the claimants. (6-3)