Opinion 202
Question Presented
Where an attorney has been retained by insurer to proceed against a third party for loss paid to insured under a collision policy, may the attorney communicate directly with insured and advise him that his action for personal injuries may be barred by such subrogation suit, and further list alternative courses of action for the insured, one of which is to employ said attorney to handle the personal injury claim along with insurer's subrogated interest?
18 Baylor L. Rev. 290 (1966)
SOLICITATION - EMPLOYMENT - INSURANCE - SUBROGATION
An attorney, handling insurer's subrogation claim against a third party, in notifying insured of possible effect of pending litigation upon any possible claim of insured for personal injuries, cannot suggest or assume that insured should sue for his injuries, nor can attorney offer his services to handle the insured's personal injury claim along with the insurer's subrogation claim for the property damage.
Canons 24, 25.
The committee agrees unanimously that such a letter clearly violates Texas Canon 24 which prohibits solicitation. A majority of the Committee believes that the action also violates Texas Canon 25, which prohibits the volunteering of advice to bring a lawsuit. The violation of Canon 25 is found in the degree in which the letter suggested and assumed that the insured should want to sue for his personal injuries. The letter spelled out in some detail the effect of a suit brought by the insurer. The Committee is of the opinion that the attorney, because of the peculiar relationship present, had a duty to give some notice to the insured that the matter to be litigated could well affect his rights, even though such action might to some extent constitute stirring up litigation. With regard to Canon 9, which prohibits the giving of legal advice to a party not represented by counsel, the majority of the Committee found no violation, while a minority felt that the particular letter contained more advice as to the law than was necessary to discharge the duty of giving notice to the insured. (6-0)
Bluebook Citation
Tex. Comm. On Professional Ethics, Op. 202 (1960)