Advisory Opinion 12
Reporter sues insurance company, then reports their depositions (1991)
Statement of Facts
A reporter who owns and operates her own reporting company has filed a lawsuit against an insurance company. The reporter brought the suit because the insurance company stopped making payments it had previously been making for chiropractic care, physical therapy, and similar services rendered to the reporter since 1982 for injuries that she claims to have suffered in a motor vehicle accident in that year. This same insurance company insures a number of drivers in the inquiring attorney's area.
He personally is one of the primary attorneys who represent this company's insureds in litigation brought against them, and he also represents the company itself in direct actions brought against it.
This letter raises the question whether, under the assumed facts, it would be proper under the Association's Code of Professional Ethics for the reporter herself, or a reporter associated with her company, to serve as the reporter at a deposition or other proceeding in which the insurance company is involved. The insurance company could be involved in either of two ways: either directly, as a named party in the litigation itself, or indirectly, as the insurance carrier for an insured who is a party to the action.
The provisions of the Association's Code of Professional Ethics that may be relevant are Provisions 1, 2, 3, and 9. These provisions provide as follows:
The Member Shall:
No. 1. Be fair and impartial toward each participant in all aspects of reported proceedings.
No. 2. Be alert to situations that are conflicts of interest or that may give the appearance of a conflict of interest. If a conflict or a potential conflict arises, the reporter shall disclose that conflict or potential conflict.
No. 3. Guard against not only the fact but the appearance of impropriety.
No. 9. Maintain the integrity of the reporting profession.
The Committee believes that Provision 2 is the principal Code provision that governs this situation. We find no basis in the Code for concluding that a reporter in a conflict of interest situation, actual or potential, who complies with the specific conflict of interest requirements of Provision 2, could nonetheless be held to have violated the broader, more general, requirements of provisions 1, 3, or 9. Otherwise, conduct that was permitted under the specific provision of the Code applicable to the conduct in question could expose the reporter to disciplinary proceedings under other provisions of the Code. In our view, such a construction of the Code would make no sense and would not further the purposes of the Code.
Provision 2 of the Code requires the reporter to ``Be alert to situations that are conflicts of interest or that may give the appearance of a conflict of interest.'' When either a ``conflict of interest'' or ``the appearance of a conflict of interest'' arises, however, the reporter's sole obligation is to ``disclose that conflict or potential conflict.''
As long as the reporter makes full disclosure, in advance, to all parties about the circumstances giving rise to the conflict or potential conflict, and all parties consent to the reporter's serving as reporter, there is nothing in the Code that precludes the reporter from serving as the reporter in the proceeding in question.
The Committee finds support for its interpretation of Provision 2 in the Committee's Public Advisory Opinion No. 2, issued in 1987. In that Opinion, the Committee held it would be a violation of the Code for a reporter to fail to disclose the existence of a relationship ``whether family, outside business, or personal'' between the reporter and any of the counsel or parties to the proceeding. The Committee also indicated that the reporter could report the proceeding if all parties consented, after advance disclosure of the relationship.
Similarly, in Public Advisory Opinion No. 3, also issued in 1987, the Committee concluded that, as long as the reporter fully disclosed in advance to all parties that the reporter's spouse was a member of the law firm that engaged the reporter to report a proceeding and was thus a partner of the lawyer who was to conduct the examination, and all parties consented, the Code permitted the reporter to report the proceeding.
Accordingly, the Committee believes that it would not be a violation of the Code for the reporter to serve as a reporter in any proceeding in which the insurance company is involved as a party as long as (1) she discloses in advance the fact of her lawsuit against the insurance company to all counsel and all parties and (2) all parties nonetheless consent to her serving as reporter. If any counsel or party objects, she should not report the proceeding.
In situations where the insurance company's involvement is indirect only (meaning that the company is not a party to the litigation, but is providing insurance coverage for an insured who is a party), we see no reason to require the reporter to disclose her lawsuit and obtain all parties' consent, for several reasons:
For one thing, there may be nothing in the record of the case being reported that alerts the reporter to the insurance company's indirect involvement. Insurance companies usually go to great lengths to keep secret the fact that they are insuring one of the parties to a lawsuit. Second, the potential conflict of interest in such a case seems far more remote. Often the nature and extent of the insurance company's share of any liability that may be found against its insured cannot be determined until the final resolution of the case (because of the insurance companies' use of ``reservation of rights'' letters; the amount, if any, of the applicable deductible; and the possibility of a judgment against the insured in excess of the policy limits).
Against this backdrop, we believe that there is no reasonable likelihood that the reporter would be biased against the insured in this situation (in order to impose liability on the insurance company), nor do we believe that reasonable people would think there was such a likelihood. In short, in this situation, the relationship between the reporter and the insurance company seems too tenuous and remote to give rise to any concerns about a potential conflict of interest.
In our view, Provision 2 imposes no disclosure obligation on reporters who are employed (or engaged as independent contractors) by the reporting company that is owned by the reporter in question, to report a proceeding involving the insurance company, either directly or indirectly. There is nothing in the Code that imputes the actual or potential conflicts of interest of the owner of a reporting company to each reporter who is employed or engaged as an independent contractor by such company, so as to impose the same disclosure obligations on the employee/independent contractor reporter as are imposed on the reporting company's principal.
We add that the Committee's sole function in rendering this advisory opinion is to determine what mandatory obligations the Code imposes on reporters under the circumstances we have assumed; in other words, what are the minimum requirements of the Code, the violation of which will subject a reporter to discipline under the Association's Complaint Procedures.
The Committee's determination that the Code does not require disclosure in certain circumstances should not be understood as a prohibition or recommendation in any way against a reporter's making a disclosure, and obtaining the parties' consent, concerning any situation that the reporter believes may constitute an actual or potential conflict of interest. Reporters are free (subject to the requirements of Provision 4 regarding the reporter's duty to preserve the confidentiality of information entrusted to him or her by any party to the proceeding) to make such disclosures and obtain such consents as they feel are necessary or appropriate under the circumstances. We deal here only with the question of when they are required to make such disclosures and obtain such consents.
The letter in question also expressed concerns about the possible application of a state Supreme Court's Code of Professional Responsibility to this and other lawyers' dealings with the reporter in question. We have no authority to interpret the provisions of that Code of Professional Responsibility, which govern the conduct of attorneys, not reporters, and we will not express any opinion on such matters.
THIS PUBLIC ADVISORY OPINION REFLECTS THE STATUS OF THE LAW IN MOST JURISDICTIONS. MEMBERS ARE REQUIRED TO CONFORM TO THE ACCEPTED PRACTICES SET FORTH IN THIS PUBLIC ADVISORY OPINION TO THE EXTENT THAT SUCH PRACTICES ARE CONSISTENT WITH THEIR OWN APPLICABLE STATE AND LOCAL LAWS, RULES AND REGULATIONS.