Parties involved in litigation should be aware of consideration, relative to release language, being given by the Lawyer Disciplinary Board of West Virginia. Wording used in releases for settlements of a case obviously may differ. The Lawyer Disciplinary Board recognizes that releases might request that a plaintiff?s attorney agree to indemnify and hold the opposing party harmless for claims to the settlement funds by third parties. For example, such language might be contained in releases relative to the handling of Medicare?s interest in recovering amounts paid for Medicare benefits. In light of such release language, the Lawyer Disciplinary Board in West Virginia is considering the issuance of an opinion that would make an attorney?s agreement to indemnify and hold harmless the opposing party from claims to the settlement funds by third parties, a violation of the Rules of Professional Conduct.
The language that is being contemplated by the Board is based on opinions from Arizona, Florida, Illinois, Indiana, Missouri, New York City, North Carolina, Ohio, South Carolina, Tennessee, and Wisconsin, in addition to the West Virginia Rules of Professional Conduct, which provide that:
an attorney may not provide financial assistance to a client beyond advancement of costs and expenses for the litigation;
an attorney?s agreement by a lawyer to indemnify the opposing party from future claims ?creates a situation wherein the lawyer undertakes an obligation to pay the client?s bills which are not considered to be court costs or expenses of the litigation"; and
an attorney may not represent a client if the representation will be ?materially limited by the attorney?s own interest.?
The proposed language from the Lawyer Disciplinary Board also warns that it would be a violation of the Rules of Professional Conduct for a defense attorney to propose or require the plaintiff?s attorney to make a personal agreement to indemnify the paying party ?from any and all claims by third persons to the settlement funds.? The Lawyer Disciplinary Board in West Virginia is accepting comments on the issue until October 12, 2012.