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                                         114 N.J.L.J. 387
                                        October 11, 1984

ADVISORY COMMITTEE ON PROFESSIONAL ETHICS


Appointed by the New Jersey Supreme Court

OPINION 542

Attorney's Files
Confidences And Secrets of
Clients Time Within Which To Retain

    We are asked whether or not there is a breach of DR 4-101* "Preservation of Confidences and Secrets of a Client" where the attorney for an insured delivers that attorney's closed case file to his employer (i.e., the insurer) without retaining copies.
    Here, upon dismissal, discontinuance, or settlement, the insured's attorney forwards the entire file to the Claims Department of the insurer covering the claim. After six months that Claims Department combines its own file with that of the attorney and sends both to a central storage facility. Then after three years all those files are destroyed. The result is that when insured's attorney is later confronted with a motion to restore the case, there is no material from which to prepare an appropriate response.
    We first observe that in the situation where an attorney is employed by an insurance company to represent the interest of the insured party to an action, that attorney's client is the insured. See our Opinion 165, 92 N.J.L.J. 831 (1969), and the authorities there cited.
* now RPC 1.6

    Under the usual indemnity policy, an assured is obligated to cooperate with the insurance company in the defense of claims made. As between insurer and the insured, the consequences of destruction of a claims file will depend upon the contractual obligations incurred between these parties.
    Since the insured is the client, it would be improper, however, to disclose to the insurer information obtained from the client in the course of preparing the case for defense unless that information was relevant to the issues in the defense and disclosure was required under the contract obligation.
    DR 4-101* deals with preserving clients' secrets from unauthorized disclosure, as distinguished from the obligation of protection and accountability under DR 9-102(B)(3)**. Where a file contains information or records unrelated to the claims issues, the above two rules are satisfied by returning the items directly to client or otherwise disposing of them with the client's permission.
    In the present inquiry, we find no impropriety in the practice stated, provided the returned file contains no client's secrets or confidences unrelated to the issues in question and not subject to disclosure to the insurer under the policy.
* now RPC 1.6 ** now RPC 1.15(a)

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