Rutgers School of Law, OAL case ACPE613

121 N.J.L.J. 1037
May 19, 1988

ADVISORY COMMITTEE ON PROFESSIONAL ETHICS

Appointed by the New Jersey Supreme Court

OPINION 613

Withdrawing Attorney Claiming
Referral Fee Under R. 1:39-6(d)

    An attorney filed suit for both passenger and driver of a car. Conflict developed when the defendant counterclaimed against the driver.
    Attorney for plaintiffs withdrew entirely and referred one client, the driver, to a Certified Civil Trial Attorney. We are asked whether under R. 1:39-6(d), this forwarding attorney may be paid a referral fee.
    We conclude that in this situation, a referral fee is not authorized.
    In the Supreme Court directive, set out at 91 N.J.L.J. 81 (February 8, 1968), the Court made clear that where a conflict develops on a counterclaim, an attorney may not continue to represent either driver or passenger. See our Opinion 156, 92 N.J.L.J. 481 (1969).
    In our Opinion 181, 93 N.J.L.J. 492 (1970), we held that the Court Directive cited in our Opinion 156, supra, required an attorney to withdraw from both driver and passenger cases and that a forwarding fee to the referring attorney was improper.

    In our Opinion 188, 93 N.J.L.J. 789 (1970), we held that an attorney may not continue to represent both driver and his passenger even when each waives the right to sue the other, citing the Court Directive, supra.
    The present inquirer urges that since the referring attorney no longer represent either party concerned in the litigation, he has no further interest and so may be paid a referral fee. However, the conflict precluded the forwarding attorney from participating for either party. As we said in Opinion 181, supra, payment of a referral fee after withdrawal offends the Court's Directive.
    It is argued that because R. 1:39-6(d) permits division of fees without regard to services or responsibility, the forwarding fee in this inquiry should be allowed. We hold that such permitted division does not apply to conflict situations that compel withdrawal from a case. Since the attorney may not continue in the conflict situation, he may not profit through the referral.
    While this opinion responds only to the specific question raised by this inquiry, we observe that the attorney who withdrew may be entitled to reasonable compensation for services rendered in good faith to both parties before the conflict required withdrawal. See our Opinion 304, 98 N.J.L.J. 449 (1975).

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