Civil claim settlement talks involving third parties and insurance company adjusters: When should lawyer conduct standards apply?

St. John's Law Review, Summer 2003 by Parness, Jeffrey A

1. Ex Parte Communications

Assuming there are no unauthorized legal practice barriers, can professional legal services standards be applied to third-party adjusters for communicative acts extending beyond those directed at unrepresented third parties as found in Jones? Consider, for example, whether Klein would be held to professional legal services standards on ex parte communications involving possible France family and Allstate liability had the Joneses then been represented by counsel. Some American ex parte contact standards forbid a lawyer from communicating "with a person the lawyer knows to be represented by a[nother] lawyer" unless the other lawyer consents or there is authorization, while other standards forbid lawyer communications only "with a party" known to be represented.64 In either setting, assuming the rules operate differently, as only in the latter might pending litigation be a factor, should Klein be held to these lawyer conduct standards?65

2. Confidentiality

Consider, as well, whether Klein would be obligated to maintain the confidentiality of information about the accident that she received from Jeremy France and other France family members, from the Joneses, or from disinterested occurrence witnesses. Would any such obligations differ as between information contained in documents or other tangible things and information obtained from oral conversations or visual observations that are merely floating about in Klein's head? Of course, state professional legal services standards usually require confidentiality of most information flowing between a client and a lawyer.66 At times the confidentiality of attorney-client communications have included certain information secured from an insured by the insurer's nonlawyer adjuster.67 In Jones, however, the insured France family members at relevant times seemingly had no lawyer. Should Klein nevertheless be barred from revealing to the Joneses what the Frances told her?

Further, confidentiality standards can also include work product.68 Work product encompasses materials prepared in view of litigation and thus would include certain materials received from occurrence witnesses by insurance company adjusters investigating claims.69 In Jones, however, there may have been no reasonable anticipation of civil litigation between the Joneses and the Frances.70 Under the facts of the case, could Christy Klein have shown the Joneses any documents pertinent to the accident that she prepared or secured from occurrence witnesses?

It is not clear in Jones that the Frances would always be Klein's clients for any lawyer-client confidentiality purposes. For example, the Frances may not be clients of an Allstate-hired lawyer if they and Allstate were then involved in an insurance policy dispute. It is not even clear the Joneses would never be legal services clients of Klein, even when she works with lawyers hired by Allstate solely to represent the Frances. For example, the Joneses may be clients if they reasonably believed Klein was working to secure settlements for them of at least some civil claims arising from the accident. Further, even assuming Klein had no lawyer-client confidentiality duties,71 her information gathering on the circumstances of the accident and on any resulting claims may be work product developed on behalf of the Frances or perhaps the Joneses.72 Has Klein sufficiently acted as a lawyer so that her tangible records may contain absolutely privileged opinion work product or that her recollections of conversations about the accident could not be examined by the Joneses through questions at a deposition or in court because a lawyer usually is prevented from being "an ordinary witness"?73