A common scenario is: Plaintiff’s lawyer represents Plaintiff against Defendant in a personal injury lawsuit. Plaintiff has received third party benefits to pay for their medical care. The third-party benefit provider is making a subrogation claim against Plaintiff for reimbursement of amounts paid from a settlement or judgment. In order to settle Plaintiff’s case, Defendant sends a release that requires Plaintiff’s lawyer to sign. The release contains a provision that Plaintiff and Plaintiff’s lawyer agree to indemnify Defendant, and his/her insurers, agents, and lawyers, for any failure to reimburse, or set aside sufficient funds to reimburse, the third-party payer for medical expenses already paid and to hold Defendant harmless for any future liability.
The Ethics Committee of the Mississippi Bar finds this unethical:
“Requiring a lawyer to sign a release for ‘approval’ or ‘agreement’ of the terms can put that lawyer in direct conflict with the desires or wishes of their client. If the client wants to settle their case, but their lawyer does not want to sign the release to ‘approve’ or ‘agree to’ the terms because of fears of being bound by any of the terms of the release then the attorney cannot abide by Rule 1.2(a).
“‘Agreeing to’ or ‘approving’ a release by a lawyer would also make it difficult for said lawyer to abide by Rule 2.1, which requires lawyers to exercise independent professional judgment and render candid advice.”
Rule 1.7(b) and Rule 1.8(e) are also implicated.
The Committee notes that there are 23 other State and Local Bar Associations in the United States that have issued ethics opinions stating that it is a violation of their ethical rules for a lawyer to sign a release that calls for the lawyer to agree or approve an indemnification agreement, including Tennessee, Georgia, South Carolina, Virginia, and Florida.
Hence, the Committee concludes that it is a violation of the Mississippi Rules of Professional Conduct for an attorney to sign a release that in any way “approved” or “agreed to” terms that would obligate them unless they are a party to the matter.
Notably, the Committee further made it clear that it is a violation of the Mississippi Rules of Professional Conduct for a lawyer to ask another lawyer to sign a release that would require them to “approve” or “agree to” any of the terms of the settlement.
Miss. Ethics Opinion No.266 (Nov. 3, 2022).
(see also Crowley v. Germany, 268 So.3d 1277, 1278-1279 (Miss. 2018))