These summaries were prepared by McGuireWoods LLP lawyer Thomas E. Spahn. They are based on the letter opinions issued by the Virginia State Bar. Any editorial comments reflect Mr. Spahn's current personal views, and not the opinions of the Virginia State Bar, McGuireWoods or its clients. 
 
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37-Settlements

54-Insurance Defense Lawyers

A lawyer representing an insurance company cannot "draft, propose or participate in," and a personal injury plaintiff's lawyer cannot agree to, a settlement provision requiring the plaintiff's lawyer "to agree to indemnify the insurer against liens in the event that they are not paid from the settlement proceeds or the plaintiff." Citing several other states' ethics opinions, the Bar held that such a provision amounts to "improper financial assistance to the client," and creates a conflict of interest between the plaintiff and the plaintiff's lawyer (who "cannot reasonably be expected to provide an objective evaluation" of the settlement because it involves the lawyer's possible personal liability). Under the trust account rules, the plaintiff's lawyer must protect any third party's claim on the settlement proceeds when the lawyer possesses the proceeds. However, the lawyer does not have any duty, and cannot assume any duty, to pay the client's debts if the lawyer disburses the settlement proceeds and the client fails to pay those debts.

Copyright 2000, Thomas E. Spahn