Conflict of interest rule okayed by Supreme Court
The California Supreme Court has approved a State Bar amendment to the Rules
of Professional Conduct (Rule 3-310) which will offer guidance to attorneys
evaluating possible conflicts of interest in insurance matters.
The amendment was developed by a joint task force of the Judicial Council and
the State Bar, after study by the bar's ethics committee. It becomes effective
March 3.
At issue were the legal and professional responsibility conflict of interest
issues arising from the decision of the California Court of Appeal in State
Farm Mutual Automobile Insurance Company v. Federal Insurance Company.
The court held that a law firm should be disqualified for bringing an action
against an insurance company while representing a policyholder of that same
company in an unrelated insurance defense case. The representation was inconsistent
with an attorney's duty of undivided loyalty, the court said.
The language of the new amendment was crafted to offer guidance to lawyers
and courts in applying Rule 3-310. It will also aid the State Bar Court in disciplinary
matters, the State Bar's Office of Enforcement in exercising prosecutorial decisions
and civil courts in deciding disqualification motions and malpractice claims.
The State Bar's amendment request to the Supreme Court can be found on the
bar's Web site, www.calbar.ca.gov
(Attorney Resources> Ethics Information>Ethics News).
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