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Conditions Imposed on Lawyer by Client’s ERISA Plan

Adopted: April 26, 2019

Opinion rules that a lawyer may not agree to terms in an ERISA plan agreement that usurp client’s authority as to the representation.

Lawyer represents an injured worker in a denied workers’ compensation claim. Client participated in a self-funded health benefits plan (Plan) though his workplace. The Plan was established under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C.A. § 1001 et seq. As a precondition to issuing payments for Client’s medical expenses, the Plan requested that Client and Lawyer sign an Agreement that includes the provisions described below.

The Agreement between the Plan and Lawyer’s client (referred to as “the promisor”) sets out that the promisor was injured on the job; that the promisor is currently proceeding or promises to initiate a claim against his employer; that the promisor’s claim is disputed; and that the promisor is in need of benefits under the Plan.

The Agreement states that, as a condition of receiving Plan benefits, the promisor agrees to fully prosecute his pending claim and agrees not to abandon or settle his claim without the written approval of the Plan. The Agreement states that the promises made in the Agreement are binding upon the promisor and the promisor’s attorney and requires the signature of the promisor’s attorney.


Do the Rules of Professional Conduct permit Lawyer to agree not to abandon or settle the Client’s claim without the approval of the Plan?


No. Lawyer may not agree to any terms in the Agreement that contradict Lawyer’s professional responsibility to abide by Client’s directives regarding the representation as set out in Rule 1.2.

The Agreement requires Client and his counsel to fully prosecute the pending workers’ compensation claim and to obtain written approval from the Plan before abandoning or settling the claim. As to Lawyer, these requirements conflict with Lawyer’s professional responsibilities to Client as set out in Rule 1.2. Pursuant to Rule 1.2, Lawyer has an ethical obligation to “abide by a client’s decisions concerning the objectives of representation” and “abide by a client’s decision whether to settle a matter.” If Client signs the Agreement and subsequently decides to abandon or settle the matter without the Plan’s approval, Lawyer has a professional obligation to follow Client’s directives. Lawyer may not agree to the conditions in the Agreement that usurp Client’s authority as to the objectives of the representation. 

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