Advisory Opinion 30
Ethics & Discipline / Advisory Opinions / Formal Advisory Opinions / Advisory Opinion 30
Click here for an explanation regarding the history and the binding authority of this opinion.
State Disciplinary Board
Advisory Opinion No. 30
November 17, 1982
Ethical Propriety of Agreement by Which Attorney's Fees are Paid by Opposing Party
Question: A is the plaintiff in a lawsuit against B which is pending in the Northern District of Georgia. B is the debtor in a proceeding in the United States Bankruptcy Court in the Northern District of Texas. In addition, there is pending in the same Bankruptcy Court in Texas an action in which B is the plaintiff and C, D, and E are defendants. E is also a full-time employee of A. B contends that C, D, and E are or may be liable to B for all or part of the claims being asserted against B by A in the Georgia litigation.
A and B have agreed upon a complete settlement of all matters in controversy between them in a settlement agreement which must be approved by the Bankruptcy Court.
The settlement agreement provides that the Georgia litigation will be dismissed with prejudice. B will ask the Bankruptcy Court to dismiss E as a defendant in that Court, without prejudice to further proceedings by B against C and D, and will give E a covenant not to sue. however, the parties recognize that there is a possibility that C and/or D will assert claims against E and/or A, seeking contribution from either or both of them, either in the pending action in the Bankruptcy Court or in some other action. In order to protect both E and A, B has agreed to indemnify and hold them harmless from "expenses and costs of defending such claims, including reasonable and necessary attorneys' fees," subject to obtaining a written opinion from the State Bar of Georgia that such agreement is ethical and is not a violation of the Canons of Ethics.
Opinion: It is the opinion of the State Disciplinary Board of the State Bar of Georgia that the foregoing agreement is ethical and is not a violation of the Canons of Ethics, provided that a full disclosure of all pertinent facts has been made to all parties who may be affected by such agreement, give their written consent to it; and, provided further, that the attorneys at all times exercise their independent professional judgment for their respective clients regardless of who is responsible for paying the fees of the attorneys.
GO TO Advisory Opinion 29
GO TO Advisory Opinion 31
Return to handbook browser.