Advisory Opinion:
1888
Year Issued:
1999
RPC(s):
RPC 1.6; 4.1(a)
Subject:
Client confidence or secret; disclosure of fee agreement to insurer with subrogation interest; disclosure of side agreement
The inquiry concerned the issue of whether it is permissible for a lawyer to disclose the fee agreement with a client to that client’s insurer, who has a subrogation interest in a recovery and an obligation to pay fees and a portion of costs; and, whether the lawyer is required to disclose the terms of an agreement with the client to reduce the fees to the lawyer to effect settlement.
The fee agreement would not generally be considered to be a "confidence" as defined in the Rules of Professional Conduct. It also would not be considered a "secret", unless the client had requested it not be disclosed or the information contained within would be embarrassing or would be likely to be detrimental to the client. Even if the fee agreement is "confidences or secrets" under RPC 1.6, disclosure seems necessary to provide maximum recovery for the client and to "carry out the representation." Although the lawyer may disclose the fee agreement, he or she would be wise to obtain the client’s prior consent.
In addition, the lawyer must disclose to the insurer, pursuant to RPC 4.1(a), the terms of any "side agreement" with the client that modifies the terms of the contract concerning the payment of fees, since the contract with the client controls the fees paid by the insurer.
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