Opinion 326
Question Presented
Attorney A of the law firm A, B & C defends a Workmen's Compensation case for insurance company I. Deposition of the plaintiff P is taken and the case is either settled or disposed of by a final judgment. Plaintiff P then brings a third-party action against defendant D by reason of the same accident. May attorney A or any member of his firm then represent the defendant D in the damage suit?
23 Baylor L. Rev.855 (1972)
CONFLICT OF INTEREST - DEFENSE OF DAMAGE SUIT AFTER DEFENSE OF WORKMEN'S COMPENSATION SUIT ARISING OUT OF SAME ACCIDENT
An attorney who defends a Workmen's Compensation case may not thereafter defend a damage suit by the same plaintiff for the same accident if the subrogation claim of the Workmen's Compensation carrier is involved.
Canon 6.
If the insurance company I paid any Workmen's Compensation or medical benefits to the plaintiff in the Compensation case it of course has subrogation rights which would be involved in the damage suit and in that case it is clear that Attorney A and all members of his firm would be disqualified under Canon 6 from defending the damage suit by reason of the conflict of interest with the insurance company. See Opinion 299 (May, 1965), which is the exact converse of the present situation, and compare Opinions 313 and 317 (January, 1966).
If, however, the insurance company paid no benefits in the Workmen's Compensation case and has no subrogation rights there is no conflict of interest and Attorney A or any member of his firm may ethically defend the damage suit. At no stage has there been any confidential relationship with the plaintiff P which would preclude the employment of A or any member of his firm. (8-0.)
Bluebook Citation
Tex. Comm. On Professional Ethics, Op. 326 (1966)