ALI approves Restatement of Law governing lawyers.

Position:American Law Institute

After being under consideration for a decade, the Restatement of the Law Governing Lawyers was approved at the American Law Institute annual meeting in May.

Defense counsel have been most interested in Section 215 of the Restatement, entitled "Compensation or Direction by Third Person," which undertakes to govern the relationship of insurer-retained counsel to the insured and the insurer--the so-called tripartite relationship. At the May meeting, Section 215 was amended by a floor motion that carried by a vote of 166-118, so that the final form of the section, with the amendment shown in italics, is:

[sections] 215. Compensation or Direction by Third Person

(1) A lawyer may not represent a client under circumstances in which someone other than the client will wholly or partly compensate the lawyer for the representation, unless the client consents under the limitations and conditions provided in [sections] 202, with knowledge of the circumstances and conditions of the payment.

(2) A lawyer's professional conduct on behalf of a client may be directed by someone other than the client when:

(a) (1) the direction does not interfere with the independent professional judgment of the lawyer; and (2) the direction is reasonable in scope and character, such as by reflecting obligations borne by the person directing the lawyer; (b) the client consents to the direction under the limitations and conditions provided in [sections] 202. Section 202 provides that a lawyer may represent a client notwithstanding a conflict of interest if each affected client gives informed consent, which is defined, "Informed consent requires...

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