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                                         113 N.J.L.J. 384
                                        April 5, 1984

ADVISORY COMMITTEE ON PROFESSIONAL ETHICS

Appointed by the New Jersey Supreme Court

OPINION 527

Conflict of Interest
Dual Representation of Defendant,
Physician, and Defendant Hospital

    The inquirer, "an attorney in the State of New Jersey engaged in the practice of law representing plaintiffs in medical malpractice cases" presents the following question:
        Whether the same law firm may represent both defendant physician and defendant hospital in a medical malpractice case without violating DR 5-105.

    In presenting the inquiry he states:

        In many cases with which I have been concerned the same law firm has represented both defendant physician and defendant hospital, and/or two or more physicians, during settlement negotiations and litigation. The ethical problem exists when one defendant has contribution rights against the other defendants, or has knowledge of malpractice that could lead to an early settlement, which is not disclosed during discovery on advice of counsel.

    He submits further:

        ... that when an attorney represents both defendants who may have contribution rights against each other, a conflict of interest exists much like the situation where the same firm represents both the driver and passenger in an automobile accident. Furthermore, the attorney may become privy to information which verifies the rights of one defendant against the other, or information which, while exculpating one defendant completely, inculpates the other. In the former situation there is a clear conflict; in the latter, an apparent conflict because the attorney may not advise the client to disclose such information without violating DR 4-101 with regard to the actual tortfeasor.

    He, therefore, submits that the foregoing would constitute unethical conduct in violation of DR 5-105.
    DR 5-105 is captioned as follows:
        Refusing to Accept or Continue Employment if the Interests of Another Client May Impair the Independent Professional Judgment of the Lawyer.

    The Disciplinary Rule contains four subdivisions, Paragraphs (A) through (D). We are primarily concerned with Paragraphs (A) and (B), and the extent to which (C) is an exception thereto.
    Paragraph (A) is a prohibition against accepting employment "if the exercise of an attorney's independent professional judgment in behalf of a client will be or is likely to be adversely affected by the acceptance of the proffered employment, except to the extent permitted under DR 5-105 (C)."
    Paragraph (B) provides that a lawyer shall not continue multiple employment under the same conditions; namely, if the attorney's independent professional judgment in behalf of a client will be or is likely to be adversely affected by his representation of another client except to the extent permitted under DR 5-105 (C).
    We, therefore, look to Paragraph (C) to determine whether the facts and circumstances in this case, as submitted, come within the exceptions to the general rule.

    DR 5-105 (C) provides as follows:
        In situations covered by DR 5-105 (A) and (B) except as prohibited by rule, opinion, directive or statute, a lawyer may represent multiple clients if he believes that he can adequately represent the interests of each and if each consents to the representation after full disclosure of the facts and of the possible effect of such representation on the exercise of his independent professional judgment on behalf of each.

    The said subsection is clear and unambiguous and defines the standard of conduct and the duties and obligations of an attorney in representing multiple clients. Therefore, an attorney who represents a defendant physician or physicians and a defendant hospital and who sincerely believes that he can adequately represent the interests of each, each of his clients consents to the representation after a full disclosure of the facts and of the possible effect of such representation in the exercise of his independent professional judgment on behalf of each, may represent such multiple clients.
    The consent must be an informed consent and must be nothing less than "knowing, intelligent and voluntary. Consents must be obtained in such a way as to insure that the client has adequate time...to reflect upon the choice..." See In re Dolan, 76 N.J. 1, 13 (1978).
    The factual situation described by the inquirer undoubtedly involves the representation of a hospital and a physician or physicians by an attorney who has been retained by one or more insurance companies and, therefore, all parties in interest would be litigants and their representatives who are well informed and sophisticated. The weight to be given to the consents of such litigants is considerably greater than that usually involved in the consents referred to in other cases, such as Dolan. See footnote 1 1
    It is not for this Committee to decide when an attorney should make the decision that he can "adequately represent the interests of each," but attorneys should be cautioned that great care should be taken in making this decision so as not to cause unnecessary delay when it later becomes clear that such multiple representation cannot continue.
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Footnote: 1    1

The Supreme Court directive set forth in 91 N.J.L.J. 81 (Feb. 8, 1968) specifically prohibits representation of conflicting interests even with informed consent in automobile cases. Subsequently, that directive as modified by Supreme Court directive October 8,1970 (93 N.J.L.J. 712) in cases involving husband and wife or parent and child.

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