Tripartite Relationship and Conflicts of Interest in Insured Defendants Defense

The tripartite relationship between insurer, insured, and defense counsel can give rise to ethical, legal, and economic tensions. Understanding the client for counsel retained by an insurer is crucial, as the attorney may owe dual professional obligations to both the insurer and the insured. While the majority of jurisdictions recognize the dual client relationship, a significant minority believes counsel retained by an insurer solely represents the insured.

• Tripartite Relationship
• Insured Defendants
• Conflict of Interest
• Legal Ethics
• Dual Client Relationship

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1. Something Wicked This Way Comes: The Tripartite Relationship and Conflicts of Interest in the Defense of Insured Defendants Donald Patrick Eckler Paul Ruscheinski Pretzel & Stouffer, Chartered One South Wacker Drive Suite 2500 Chicago, Illinois 60606 312-346-1973

2. The Tripartite Relationship [The] so-called tripartite relationship has been well documented as a source of unending ethical, legal, and economic tension. State Farm v. Tarver, 980 S.W.2d 625 (Tex. 1998) (Gonzales, J., dissenting) These issues are terribly important and must be managed correctly by insurance adjustors because the failure to properly recognize a conflict and to appoint independent counsel where appropriate could lead to the carrier being estopped. Employers Insurance Company of Wausau v. Ehlco Liquidating Trust, 186 Ill.2d 127 (1999).

3. Who is the client for counsel retained by an insurer? Does the client of counsel retained by the insurer have two clients or just one? To whom are the loyalties owed by counsel retained to represent the insured?

4. Dual Client Relationship The majority of jurisdictions hold that counsel retained by the insurer to represent the insured has two clients, both the insurer and the insured. This is the majority position. See Restatement of The Law Governing Lawyers Sections 26(1) and 215; Illinois Rules of Professional Conduct Rule 1.7; ABA Model Rule 1.7(b), comment 10, and Rule 1.8(f); Waste Management v. International Surplus Lines Insurance Company, 144 Ill.2d 178 (1991); Nandorf v. CNA Insurance Companies, 134 Ill.App.3d 134 (1st Dist. 1985); Cincinnati Insurance Company v. Wills, 717 N.E.2d 151, 161 (Ind. 1999); Nezley v. Nationwide Mutual Insurance Company Company, 296 N.E.2d 550, 561 (Ohio App. 1971); Goldberg v. American Homes Assurance Company, 439 N.Y.S.2d 2, 5 (N.Y. App.Div. 1st Dep t 1981); Lieberman v. Employers Insurance, 419 A.2d 417, 424 (N.J. 1980); Bogard v. Employer s Casualty Co., 210 Cal.Rptr. 578, 582 (Cal.App. 1985); McCourt Co., Inc. v. FPC Properties, Inc., 434 N.E.2d 1234, 1235 (Mass. 1982).

5. Limitations on Dual Relationship Despite a dual relationship the attorney owes the same professional obligations to the insured as if the attorney was hired personally by the insured. Information of the client is confidential. Illinois Rule of Professional Conduct Rule 1.6. Illinois Rule of Professional Conduct Rule 1.8(f)(2) provides that the insured s Rule 1.6 information must be protected by the attorney.

6. Single Client Relationship The minority of jurisdictions, but it is a significant minority, reject the dual client relationship and hold that counsel retained by an insurer only represents the insured. In these jurisdictions there is no tripartite relationship See Michigan: Atlanta International Company v. Bell, 448 N.W.2d 804 (Mich.Ct. App. 1989); Montana: In The Matter of the Rules of Professional Conduct and Insurer Imposed Billing Rules and Procedures, 299 Mont. 321, 333-34 (Mont. 2000); Connecticut: Higgins v. Karp, 687 A.2d 539, 543 (Conn. 1997); Continental Casualty Company v. Pullman, Comley, Bradley, & Reeves, 929 F.2d 103 (2ndCir. 1998); In re A.H. Robins Co. Inc., 880 F.2d 709 (4thCir. 1989); Colorado Bar Association Formal Ethics Opinion 91 (1993); Safeway Managing General Agent v. Clark & Gamble, 985 S.W.2d 166, 168 (Tex. App. 1998); Gibbs v. Lappies, 828 F.Supp. 6, 7 (D.N.H. 1993); Givens v. Mullikin ex. rel. McElwanney, 75 S.W.2d 383, 386 (Tenn. 2000); Finley v. Home Insurance Company, 975 P.2d 1145, 1153 (Hawaii 1998); Pine Island Farmers Coop v. Erstad & Reimer, P.A., 696 N.W.2d 444, 452 (Minn. 2002)(in the absence of conflict of interest between the insurer and the insured, the insurer can become a co-client of defense counsel based on contract or tort theory if two conditions are satisfied. First, defense counsel or another attorney must consult with the insured, explaining the implications of dual representations and the advantages and risks involved ... [and] second, after consultation, the insured must give express consent to the dual representation. )

7. Restrictions on Defense Counsel Placed by Insurer Irrespective of whether a state follows the dual client or single client approach, restrictions on the activities of the defense counsel which hamper the defense are likely to be impermissible. Billing restrictions and other procedures must not interfere with the ability of defense counsel to provide a defense. In The Matter of the Rules of Professional Conduct and Insurer Imposed Billing Rules and Procedures, 299 Mont. at 335

8. Restrictions on Defense Counsel Placed by Insurer Dynamic Concepts, Inc. v. Truck Insurance Exchange, 61 Cal.App.4th 999, 1009 (1998) ( [t]his is not a case where Truck restricted defense counsel's discovery activities to reduce litigation costs. Insurer-imposed restrictions on discovery or other litigation costs may well violate the insurer's duty to defend as well as the attorneys' ethical responsibilities to exercise their independent professional judgment in rendering legal services. ) In re Youngblood, 895 S.W.2d 322, 328 (Tenn. 1995) ( Any policy, arrangement or device which effectively limits, by design or operation, the attorney's professional judgment on behalf of or loyalty to the client is prohibited by the Code, and, undoubtedly, would not be consistent with public policy. )

9. Issues that Arise in Tripartite Relationship Defense counsel has a duty not to disclose adverse coverage information to the insurer. See Liability Insurance Company v. Superior Court, 38 Cal.App.3d 579, 592 (1974); Employers Casualty Company v. Tilley, 496 S.W.2d 552 (Tex. 1973); Illinois Rule of Professional Conduct Rule 1.8(b) and (f) and 5.4(c). Insured has duty to cooperate even where the insurer has taken an adverse coverage position. See Waste Management, Inc. v. International Surplus Lines Insurance Company, 144 Ill.2d 178 (1991).

10. Conflicts That Arise in the Defense of the Insured Simply because there is a dispute regarding coverage or some other issue, it does not mean there is a conflict What has to be determined is if the interests of the insurer and the insured diverge and if counsel retained by the insurer will then labor under a conflict. Rules 1.7, 1.9, and 1.10 define when a conflict exists and under what conditions the lawyer can continue the representation.

11. Applicable Rules for Conflicts Illinois Rule of Professional Conduct Rule 1.7 states: (a) Except as provided in paragraph (b), a lawyer shall not represent a client if the representation involves a concurrent conflict of interest. A concurrent conflict of interest exists if: (1) the representation of one client will be directly adverse to another client; or (2) there is a significant risk that the representation of one or more clients will be materially limited by the lawyer s responsibilities to another client, a former client or a third person or by a personal interest of the lawyer.

12. Applicable Rules for Conflicts Illinois Rule of Professional Conduct Rule 1.7 further states: (b) Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a lawyer may represent a client if: (1) the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client; (2) the representation is not prohibited by law; (3) the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal; and (4) each affected client gives informed consent.

13. Applicable Rules for Conflicts Illinois Rule of Professional Conduct Rule 1.9 states: (a) A lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person s interests are materially adverse to the interests of the former client unless the former client gives informed consent.

14. Applicable Rules for Conflicts Illinois Rule of Professional Conduct Rule 1.9 further states: (b) A lawyer shall not knowingly represent a person in the same or a substantially related matter in which a firm with which the lawyer formerly was associated had previously represented a client (1) whose interests are materially adverse to that person; and (2) about whom the lawyer had acquired information protected by Rules 1.6 and 1.9(c) that is material to the matter; unless the former client gives informed consent.

15. Applicable Rules for Conflicts Illinois Rule of Professional Conduct Rule 1.9 further states: (c) A lawyer who has formerly represented a client in a matter or whose present or former firm has formerly represented a client in a matter shall not thereafter: (1) use information relating to the representation to the disadvantage of the former client except as these Rules would permit or require with respect to a client, or when the information has become generally known; or (2) reveal information relating to the representation except as these Rules would permit or require with respect to a client.

16. Applicable Rules for Conflicts Illinois Rule of Professional Conduct Rule 1.10 states: (a) While lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by Rules 1.7 or 1.9, unless the prohibition is based on a personal interest of the prohibited lawyer and does not present a significant risk of materially limiting the representation of the client by the remaining lawyers in the firm.

17. Applicable Rules for Conflicts Illinois Rule of Professional Conduct Rule 1.10 further states: (b) When a lawyer has terminated an association with a firm, the firm is not prohibited from thereafter representing a person with interests materially adverse to those of a client represented by the formerly associated lawyer and not currently represented by the firm, unless: (1) the matter is the same or substantially related to that in which the formerly associated lawyer represented the client; and (2) any lawyer remaining in the firm has information protected by Rules 1.6 and 1.9(c) that is material to the matter. (3) A disqualification prescribed by this Rule may be waived by the affected client under the conditions stated in Rule 1.7.

18. Does the Conflict Require the Appointment of Independent Counsel? Where a conflict exists independent counsel must be offered by the insurer to the insured. The question is question is whether the interest of the insured and the insurer diverge in such a way that the retained counsel is in conflict with the insured. Blanchard v. State Farm Fire & Casualty Company, 2 Cal.App.4th 345, 350 (1991) ( not every reservation of rights creates a conflict of interest requiring appointment of independent counsel. ); Nisson v. American Home Insurance Company, 917 P.2d 488 (Okl.App. 1996); Northern County Mutual Insurance Company v. Davalos, 140 S.W.3d 685, 689 (Tex. 2004) (If the insured s liability and the coverage issues turn on the same facts, the insured is entitled to independent counsel.)

19. Specific Instances of Conflict That Arise in the Insurance Defense Context - Potential Excess Judgment In such a situation, make sure defense counsel advises the insured of the potential excess judgment. R.G. Wegman Construction Company v. Admiral Insurance Company, 629 F.3d 724 (7thCir. 2011); Allstate Insurance Company v. Campbell, 334 Md. 381, 397 (Md. App. 1994); Hartford Accident & Indemnity Company v. Foster, 528 So. 2d 255, 270-273(Sup.Ct.Miss. 1988).

20. Specific Instances of Conflict That Arise in the Insurance Defense Context - Punitive Damages There is a split as to whether pleading punitive damages creates a conflict. Company v. Peppers, 64 Ill.2d 187 (1976) (pleading of punitive damages creates conflict); see also, Cal. Civil Code 2860 (b) (pleading of punitive damages does not create conflict) and Alaska Stat. 21.89.100(b) (pleading of punitive damages does not create conflict) Maryland Casualty

21. Specific Instances of Conflict That Arise in the Insurance Defense Context - Punitive Damages One of the best statements of the conflict created by pleading punitive damages is in Magnum Foods, Inc. v. Continental Casualty Company, 36 F.3d 1491, 1506 (10thCir. 1994). The Court held: When an insurer owes or undertakes the duty to defend its insured in a suit seeking both insured and uninsurable damages, it has the duty to conduct settlement negotiations in good faith as part of that defense. For one thing, this includes warning the insured of any potential exposure to him and apprising him of settlement opportunities within a reasonable time after they are presented.

22. Specific Instances of Conflict That Arise in the Insurance Defense Context - Punitive Damages We hold that here, where both compensatory and uninsurable punitive damages are sought, and CNA assumed the defense of the entire suit under the obligations of the policies, the presence of the punitive claim did not absolve CNA from its obligation of good faith in handling the entire case. That duty of good faith does not include settlement or a contribution to settlement by CNA of the uninsurable punitive claim. We are convinced, however, that CNA's duty of good faith included working cooperatively with Magnum throughout in both defending and attempting to settle the entire case, with fair consideration given to Magnum's concerns because of its exposure to the uninsured punitive claim. The good faith duty of CNA thus required cooperative efforts by CNA with Magnum throughout to handle and settle the entire case.

23. Specific Instances of Conflict That Arise in the Insurance Defense Context Substantial Deductible or Self-Insured Retention In American Home Assurance Company, Inc. v. Hermann s Warehouse Corp, 117 N.J. 1 (N.J. Sup. Ct. 1989) the New Jersey Supreme Court held that: The difference between the exposure-to-excess verdict and the settlement-including-deductible situations as it may affect a carrier s discharge of its good-faith duty to its insured is obvious. In the former, the insured s funds are put in jeopardy when, in the face of the probability of an adverse verdict in excess of the policy limits, the carrier rejects a claimant s demand to settle for a figure within the limits of the liability coverage.

24. Specific Instances of Conflict That Arise in the Insurance Defense Context Substantial Deductible or Self-Insured Retention However, where the insured has contracted away the right to control settlement and deductible clause, that the carrier s funds are not at risk until the deductible amount has been exhausted, there may be a conflict in the sense that the insured s money may be paid without the insured s knowledge, approval or permission. But that is exactly what the contract calls for. has agreed, through a In a situation such as this, the insured and the insurer must be fully advised of the relative interests in order to avoid conflict.

25. Miscellaneous Instances of Conflict Under Illinois Law Conflict existed because the alleged conduct may have occurred within multiple policy periods. Doe v. Illinois State Medical Inter-Insurance Exchange, 234 Ill.App.3d 129 (1stDist. 1992). Conflict of interest because the insurer asserted last notice of defense after default judgment was entered. Mitchell v. Tatum, 104 Ill.App.3d 986 (1stDist. 1992). Assertion as late notice as defense to coverage typically does not create a conflict of interest.

26. Miscellaneous Instances of Conflict Under Illinois Law Conflict of interest existed because there was a question as to whether the driver of a vehicle had permission to operate the vehicle. Murphy v. Urso, 88 ILL. 2d 444, 453-54 (1981). Conflict of interest existed because some of the underlying allegations would be coverage by the policy whereas other allegations would not be. Burlington Northern R. Co. v. Illinois Emcasco Insurance Company, 158 Ill.App.3d 783 (1stDist. 1987);

27. Miscellaneous Instances of Conflict Under Illinois Law The best example of conflict under Illinois law is in American Family Mutual Insurance Company v. W.H. McNaughton Builders, Inc., 363 Ill.App.3d 505, 514 (2ndDist. 2006). In that case the Court held: A conflict arises when the divergent interests of the insurer and insured are apparent and the attorney representing the insured can no longer represent both clients interests without prejudice to either client. A conflict already exists here because [the insurer s] interests would be served by fleshing out in discovery facts showing that the damage to the Begys home occurred prior to the inception of the Policy, while McNaughton s interests would be served by fleshing out facts showing that the damage occurred after the inception of the Policy. In this regard, an attorney representing [the insurer s] interests would be the enemy of McNaughton.

28. Disclosure of Conflict Both insurer and counsel retained by the insurer should disclose conflict The disclosure should be in writing and should set forth the nature of the conflict and offers of resolution. See Utica Mutual Insurance Company v. David Agency Insurance, 327 F.Supp2d 922, 930 (N.D.Ill. 2004).

29. Disclosure of Conflict If the insurer proceeds to defend the insured in face of a conflict of interest, it must reserve its rights in a manner that will fairly inform the insured of the insurer s position. In informing the insured of the conflict, the insurer must act openly and with the utmost loyalty to its insured both in initially explaining the insurer s position in the matter and in the actual defense of the tort litigation. Bare notice of a reservation of rights is insufficient unless it makes specific reference to the policy defense which may ultimately be asserted and to the potential conflict of interest.

30. Disclosure of Conflict The letter should include the following: (1) the attorney s relationship to the insurer; (2) the attorney s own interests; (3) the nature of the conflict between the insurer and the insured and how the defense may impact the coverage;

31. Disclosure of Conflict (4) limitation of the scope of representation to defending third-party claim only, thus limiting the ability to maximize coverage; (5) the insured s option to retain separate counsel to advise about coverage issues; and (6) the insured s right to independent counsel to defend, whose fees will be reimbursed by the insurance company. See David H. Anderson, Balancing the Tripartite Relationship between Defendant, Defense Counsel and Insurer, 88 Ill.Bar.J. 384, 388 (July 2000).

32. Disclosure of Conflict If the insured will not waive the conflict then, independent counsel should be offered to the insured.

33. Payment of Independent Counsel No rules on how much to pay in Illinois and in most other states. A reasonable amount seems to be the standard. No court has set forth what the means and there are often tremendous fights over that. An exception to that vacuum is in Florida. 627.426(2) states that the carrier shall pay agreed upon reasonable rates, or if those cannot be agreed upon, then a court will set the rate of payment. An insurer can recover payments to independent counsel who an insurer was forced to retain as a result of an erroneous judgment. Steadfast Ins. Co. v.; Caremark RX, Inc., 373 Ill.App.3d 895 (1stDist. 2007).

34. RECENT COOK COUNTY ASBESTOS CAPTION RAPID AMERICAN CORPORATION, Individually and as Successor-in-Interest to Philip Carey Manufacturing Corporation; H.B. FULLER COMPANY; UNION CARBIDE CORPORATIDN, Individually and f/k/a Union Carbide Chemicals and Plastics Company; CERTAINTEED CORPORATION; UNIROYAL, INC.; c.s. HALL COMPANY; CROWN, CORK AND SEAL, USA, INC.; KENTILE FLOORS, INC.; A.w. CHESTERTON COMPANY; JOHN CRANE, INC. f/k/a CRANE PACKING COMPANY; GEORGIA-PACIFIC LLP f/k/a GEORGIA-PACIFIC CORPORATION; DAP, INC.; INGERSOLL-RAND COMPANY; GOULDS PUMPS, INC.; STERLING FLUID SYSTEMS (USA), Individually and as Successor-in-Interest to Peerless Pump Company and as Successor-in-Interest to Indian Head, Inc.; FMC CORPORATION; GARDNER DENVER, INC.; GARDNER DENVER, INC., as Successor-in-Interest to JOY MANUFACTURING CO.; JOY TECHNOlOGIES, INC.; AIR & LIQUID SYSTEMS, INC., Successor by Merger to BUFFALO PUMPS, INC.; ITT INDUSTRIES, INC., Individually and as Successor-ln- tnterest to BELL & GOSSETT PUMP CO.; GENERAL ELECTRIC COMPANY; VIACOM, INC., Successor-by-Merger to CBS Corporation f/k/a Westinghouse Electric Corporation; CRANE CO.; YARWAY CORPORATION; ANDERSON, GREENWOOD & CO.; GRINNELL CORPORATION f/k/a GRINNElL FIRE PROTECTION SYSTEMS, INC.; GRINNELLLLC;

35. RECENT COOK COUNTY ASBESTOS CAPTION MUELLER GROUP, LLC d/b/a MUELLER FLOW, LLC; MUELLER COMPANY; HENRY PRATT COMPANY; FOSTER WHEElER ENERGY CORPORATION; RILEY POWER, INC. f/k/a RILEY STOKER CORPORATION; CLEAVER-BROOKS, INC.; A.O. SMITH CORPORATION; TRANE U.S., INC.; OAKFABCO, INC.; ZURN INDUSTRIES, LLC; BURNHAM, LLC, f/k/a BURNHAM BOILER CO.; SUPERIOR BOILER WORKS, INC.; YUBA HEAT TRANSFER, LLC; API HEAT TRANSFER, INC.; CARRIER CORPORATION; COMPUDYNE CORPORATION, Successor by Merger to YORK-SHIPLEY, INC.; DURO DYNE, INC.; AVOCET ENTERPRISES, INC. f/k/a VENTFABRICS, INC.; ESSEX SPECIAL TV PRODUCTS, LLC, Individually and as Successor-in-Interest to AMERICAN MORTELL CORPORATION and MORTELL CORPORATION; HOWDEN BUFFALO, INC.; BEAZER EAST, INC., Individually and as Successor-in-Interest to Koppers Company, Inc. and as Successor-in-Interest to Theim Corporation and Universal Refractories Company; FOSECO, INC.; ON Marine Services Company, a Delaware corporation, and a wholly owned subsidiary of Ogle bay Norton Company, an Ohio corporation; BMI REFRACTORY SERVICES, INC.; CATERPILLAR, INC.; INTERNATIONAL TRUCK AND ENGINE CORPORATION f/k/a INTERNATIONAL Successor-in-Interest to CNH America, LLC; 3M COMPANY a/k/a "3M," Individually and f/k/a MINNESOTA MINING AND MANUFACTURING COMPANY; DEERE AND COMPANY; METROPOLITAN LIFE INSURANCE CO.; PNEUMO-ABEX, as Successor-In- Interest to Abex Corporation, HARVESTER COMPANY and

36. A NUMBERS GAME Asbestos is a specialized area of law and with a significant volume of cases and overlapping defendants. The main issues in the vast majority of cases are very similar. There is likely more defendants in number than firms that specialize asbestos cases. in defending

37. DOES A CONFLICT EXIST ? Is it a conflict for one firm to represent multiple defendants generally? in asbestos cases Is it a conflict for one firm to represent multiple defendants in a single asbestos case?

38. DOES A CONFLICT EXIST ? Think back to Rule 1.7 (a) (1). The main goal for any defendant is to establish that the plaintiff was not exposed to asbestos via their product or at their job site. plaintiff was exposed to other companies products and the exposure occurred at other job sites. The

39. DOES A CONFLICT EXIST ? Even if a conflict exists a firm can still represent both companies but has to comply with the terms of Rule 1.7 (b). There can be problems with complying with the terms of Rule 1.7 (b). Rule 1.7 (b)(1) - Assume a firm represents two different asbestos clients. One client s standard defense is that they manufactured a low dose product. The other client s standard defense is that the plaintiff s other exposures proximately caused the mesothelioma. diligently represent both clients during a trial? Can an attorney competently and Rule 1.7 (b)(3) - The example above may also relate to this section of the rule given the two arguments. Another potential problem with this section is affirmative defenses. Rule 1.7 (b)(4) - There may be bad blood between industry competitors or between law firms which can impact a client s willingness to give informed consent to multiple companies.

40. CHANGING FIRMS/CLIENTS Unlike 30-40 years ago, lawyers change firms throughout their careers. In asbestos litigation, often based on insurance coverage, companies change defense counsel. The result of these two scenarios is that lawyers learn the confidences of their clients and then either move into another firm that represents other companies or a firm s clients change. What are the conflict implications? Let s assume for simplicity sake that in the two situations above, each firm represents only one client. Think about Rule 1.9 (a) and (b). If the representation is in the same case, an informed consent may be needed. Keep in mind that many of the companies overlap as defendants in the hundreds of cases that are filed each year in Madison and Cook Counties.

41. CHANGING FIRMS/CLIENTS Firms can move to disqualify an attorney and/or a firm based on prior representation of a client. If a firm moves to disqualify an attorney or firm, a court must determine whether there is a substantial relationship between the subject matter of the prior and current representations. SK Handtool Corporation v. Dresser Industries, Inc., et al, 246 Ill. App. 3d 979, 990 (1stDist 1993). If such a relationship exists, it is presumed that the client disclosed confidential information to the attorney during the representation. presumption is irrebuttable under both Illinois and federal case law. Id. However, the trend in Illinois is to allow screening procedures to rebut the presumption of shared confidences at a new firm. Id. at 991. Id. This

42. WHAT IF THE RULES REQUIRE AN INFORMED CONSENT AND YOU CANNOT OBTAIN ONE? Is it possible for the firm to still represent the client? Screening Procedures a/k/a The Chinese Wall The term Chinese Wall is a fictional device used as a screening procedure which permits an attorney involved in an earlier adverse role to be screened from other attorneys in the firm. Weglarz v. Bruck, 128 Ill.App.3d 1, 4 (1st Dist. 1984)(distinguished factually). The procedures include prohibiting the attorney in question from any contact with the case. Prohibiting the contact may be accomplished by restricting access to files, informing attorneys working on the file of the barrier, and separating the conflicted attorney from the attorneys handling the case. Id.

43. WHAT IF THE RULES REQUIRE AN INFORMED CONSENT AND YOU CANNOT OBTAIN ONE? Possible actions in setting up a screen: Intra-firm education Prohibited access to files No sharing in fees from the representation to the tainted lawyer Physical separation of attorney from active member on the file Affidavits by tainted members No informal meetings regarding the representation Name a party responsible for supervising the screen. Christopher J. Dunnigan, Conflict of Interest: The Art Formerly Known as the Chinese Wall: Screening in Law Firms: Why, When, Where, and How 11 Geo.J.Legal Ethics 291 (Winter 1998).

44. RECENT EXTREME EXAMPLE OF CHANGING SIDES An assistant managing partner at a defense firm defended multiple asbestos clients. Clark v. A.O. Smith, et al, NY Slip Op 33135U, 2 (2010). She then left the defense firm and went to work at a plaintiff s firm that was filing asbestos lawsuits against clients represented by the firm she formerly worked for. Id. at 3. The defense firm moved to disqualify the attorney and the firm. Id. The former defense counsel argued that she worked on separate unrelated cases and did not have access to the asbestos files. Id. at 3-4. The court ultimately disqualified the attorney and the firm and held that she failed to make a prima facie showing that no reasonable probability exists in which she obtained her former clients confidences. Id. at 8-9.

45. Thank You! Donald Patrick Eckler Paul Ruscheinski Pretzel & Stouffer, Chartered One S. Wacker Drive Suite 2500 Chicago, Illinois 60606 312-346-1973