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TCL > November 2013 Issue > (Right Column/Counterpoint) Addendum Increases the ­Potential for Conflict

November 2013       Vol. 42, No. 11       Page  121
Point/Counterpoint: Addendum to Formal Ethics Opinion 91: Ethical Duties of Attorney Selected by Ins

(Right Column/Counterpoint) Addendum Increases the ­Potential for Conflict
by Casey Quillen

Point/Counterpoint articles provide an open forum for the expression of ideas and address issues that are substantially related to the law, to the practice of law, or to lawyers (not matters of general interest). Any CBA member wishing to submit a Point/Counterpoint article should work with another CBA member to provide a companion article that argues for a significantly different conclusion. For further information and writing guidelines, to discuss topics in advance, or to get help finding someone to write an opposing viewpoint, contact Point/Counterpoint Coordinating Editor Fred Burtzos at

  After completing her judicial clerkship in 2005 with Colorado Supreme Court Justice Rebecca Kourlis, Casey Quillen practiced with firms focusing on insurance defense. In 2011, she formed Reubel & Quillen, LLC, where she emphasizes the litigation of architect and engineering errors and omissions claims, personal injury, and insurance bad faith defense—

My reading of the Addendum to Formal Ethics Opinion 911 (FO91) is that it is impractical as it would apply to the majority of clients defended under an insurance contract. In the tripartite relationship, the attorney’s ethical duty is to ensure that the interests of the insured are protected, while simultaneously fulfilling the insured’s contractual obligations to the carrier. This is accomplished by keeping the insured informed of the developments in the case and allowing the carrier to effectively control the result, as long as differing interests do not arise. Ambiguity created by the Addendum makes this less practical and increases the risk of a conflict arising during the defense of the insured client.

Andrew LaFontaine, my colleague in this point/counterpoint discussion, opines that the Addendum should be read simply as an attempt to update the old terminology of FO91 to reflect the new language of the Colorado Rules of Professional Conduct (Rules). I respectfully observe that had the CBA Ethics Committee (Committee) merely wanted to update FO91 in this manner, it could have replaced the phrase "consent after consultation" in the old opinion with the term "informed consent."

Addendum Requires Insured
Response for All Decisions

As I read it, the Addendum seems to backpedal on FO91’s tacit understanding that the carrier controls the purse-string decisions. The extended discussion of informed consent implies that the Committee views the new Rules as heightening the duties owed by insurance defense counsel. The Addendum does not simply note that informed consent is the new standard; it goes so far as to suggest that informed consent requires an actual response from the insured—even for purse-strings decisions.

FO91 states:

The attorney’s ethical duty is to assure that the interest of the insured are protected, while at the same time fulfilling the insured’s contractual obligations to the carrier against a backdrop where the insurance company, by virtue of financing the defense, may effectively control the result and may have its own interests at stake.

FO91 also recognizes that, although the attorney should fully advise the insured of settlement negotiations and their ramifications, the insured may be precluded by the insurance contract from interfering with settlement negotiations. This is consistent with CRS § 42-7-414(2)(b), which provides that "the insurance carrier shall have the right to settle any claim covered by the policy."

In contrast, the Addendum makes no exception for the insurer’s contractual right to control purse-string decisions by requiring actual consent from the insured client. In requiring an actual response from the insured client, the Addendum is broader than the Rules and potentially inconsistent with the insured client’s contractual obligations to his or her carrier.2

Potential Conflict of Interest

I agree that the client should be informed of settlement negotiations and decisions; however, requiring informed consent actually may create a conflict of interest and cause the client to be in breach of the insurance agreement. For example, if a settlement can be obtained for a reasonable amount within policy limits, and the insurer desires to settle but the client does not give consent (and there is no consent to settle clause in the policy), the client would be in breach of the contract and the attorney would be in a conflict position.

Although it may be possible to obtain informed consent from most insured clients, insurance defense counsel can relate tales of at least a handful of insured clients who never responded to correspondence, did not provide (or have) a valid phone number, and even failed to appear at depositions or in court after being served. In this circumstance, if the insurer desired to settle the case to protect the interest of the insured client, the Addendum literally requires actual consent:

In circumstances where the Rules require informed consent, the mere communication of information by the lawyer is not sufficient; the client must actually give the required informed consent.

With the increasing reliance on CRS § 42-7-414(3)(a) for service of process, I anticipate this will become more of a problem for independent defense counsel.3 How on earth would counsel obtain informed consent from an insured that plaintiff and the insurer cannot locate?

Scope of Informed Consent

LaFontaine suggests that a lawyer may be able to infer limited informed consent from the existence of the insurance contract itself. I think that is contrary to the express language quoted above. Moreover, if that were the Committee’s intent, why does the Addendum expressly mention that "the lawyer must obtain the client’s informed consent in order to accept fees from the insurance company" and "to disclose client information to the insurance company"? Wouldn’t these be the two most obvious implications under a contract of insurance?

Inferred consent is even more attenuated in the defense of a permissive user. I am currently litigating a case where my client is not the insured, though he is being defended by an insurance company. According to the plaintiff, he was properly served the Complaint in another state; try as I might, however, I cannot find him, much less get him to respond and give actual informed consent. In light of the Addendum, the implication of proceeding—accepting fees from the insurance company, disclosing client information, negotiating settlement—without the client’s consent (much less without the benefit of the client actually having purchased the insurance policy) gives me heartburn.

The Committee should specifically address whether the existence of the insurance contract does imply limited informed consent, as well as the scope of the informed consent. If the insurance contract does create an inference of informed consent, the statement that "the client must actually give the required informed consent" should be modified accordingly.


My fealty runs to the client; however, the reality is that the insurance carrier is footing the cost of the litigation. Generally, policies contain some type of clause wherein the carrier reserves the right to direct the course of the defense, make decisions regarding settlement, and receive information regarding the defense. The literal application of the Addendum ignores the contractual agreement between the insured client and the insurer, and requires the client to respond and weigh in on decisions contractually retained by the insurer. This creates more "moments" during the litigation where the insured client and insurer may have conflicting desires as to the control and result of litigation.

LaFontaine points out that the Rules should be viewed as tools, not traps, and that the formal ethics opinions are resources to assist attorneys in "navigating the ethical landscape." Although I don’t disagree with the intent of these resources, my concern is that the Addendum’s ambiguity muddies the waters rather than providing clarity.


1. CBA Formal Ethics Comm. Op. 91 (Jan. 16, 1993) (FO91), available at See also Addendum to Formal Comm. Op. 91 (Feb. 23, 2013), 42 The Colorado Lawyer 26 (May 2013), available at

2. Comment [6] to Colo. RPC 1.0 indicates it would be sufficient for the lawyer to make "reasonable efforts" to ensure the client possesses information adequate to make an informed decision. The Addendum, in contrast, states that the mere communication of information is not sufficient.

3. CRS § 42-7-414(3)(a) requires that the policy include language whereby the insured agrees that a civil action may be commenced against him or her by service of process on the insurance carrier.

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