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17 Constr. Law. 14 (1997)
Ethical Considerations to Multiple Representation in Construction and Surety Bond Litigation

handle is hein.journals/conlaw17 and id is 70 raw text is: Ethical Considerations to Multiple Representation in Construction and Surety Bond Litigation Robert 0. Dyer Introduction In modern litigation, the simultaneous representation by a single lawyer of two or more parties in the same action is occurring with increasing frequency. The proliferation of contractual indemnification and the esca- lating costs of litigation have undoubtedly contributed to this phenomenon. Indeed, as Robert 0. Dyer tenders of defense become increasingly commonplace and billing rates of competent trial counsel continue to rise, there may well be no satisfactory alternative to multiple representation. Separate representation might simply become impractical or unreasonably costly. Even if one assumes that multiple representation is a welcome and nec- essary adaptation by the legal profession to the practical needs of a changing society, however, care must be taken by the lawyers who undertake such engagements. Those lawyers must assure that all of their clients enjoy not only the practical benefits and economies of joint representation, but also the traditional benefits of the attorney-client rela- tionship, including undivided loyalty, independent profes- sional judgment, and privileged communication. In construction litigation, the opportunity for multiple representation arises surprisingly often. Lawyers who rep- resent contractors are frequently called upon to represent their clients' payment and performance bond sureties, as well as their contractor-clients in providing a defense against claims wherein both the principal and surety are named defendants. In these cases, the surety will generally tender the defense of its bond to the bonded contractor, pro- vided the contractor is financially sound, thereby requiring the contractor's litigation counsel to represent simultane- Robert 0. Dyer is a partner in the Phoenix office of Jennings & Haug. He specializes in construction law, fidelity and surety law, and commercial and probate litigation. Dyer is compiling and editing A Practical Guide to Construction Law for the State Bar of Arizona, which will be published in the spring of 1997. He gratefully acknowledges the contri- bution of Stacey A. Dowdell, an associate of the firm, in edit- ing this article. 14 THE CONSTRUCTION LAWYER April 1997 ously both the contractor and the contractor's bonding com- pany. The cost of the dual representation in such instances is borne entirely by the contractor. Similarly, dual representation frequently results from tenders of defense arising from the indemnification clauses ubiquitous in today's construction contracts. The lawyer with a general contractor as a client may be called upon simultaneously to defend the project owner for whom the general contractor has performed work and the lawyer's own client against a claim by an injured worker or an unpaid trade creditor. Likewise, a lawyer who represents a subcontractor in an action may occasionally be asked to defend the general contractor as well as his own client. As multiple representation becomes more routine, the danger will arise that, when presented with the opportunity to represent two clients simultaneously in the same matter, lawyers may become complacent and fail to give such prof- fered representations the careful thought and deliberate preparation they demand. Should this occur, the prospects of inadvertent ethical violations will be considerable. Ethi- cal breaches of this nature would most likely not be the product of greed or intemperance on the part of the lawyer, but rather would arise from the purest of intentions-a true desire to facilitate, expedite, and economize, all for the ben- efit of the persons simultaneously represented. Unfortu- nately, inadvertent ethical breaches by a lawyer can be just as damaging to the client and to the legal profession as those that are not. This article will endeavor to make the reader more sensitive to the special requirements of multi- ple representation and assist the lawyer in evaluating the propriety of such engagements. I. The Applicable Rules of Ethics The rules of professional conduct governing a lawyer's conduct are, in most instances, clear and exacting. As a result, lawyers generally know precisely what constitutes proper and ethical professional conduct and what does not. Such may not be the case, however, with respect to the rules governing simultaneous representation of multiple clients. Unfortunately, the rules in this area lack clarity and specificity, and thus draw no bright line between the per- missible and the impermissible. The professional conduct of most lawyers around the country is governed by the Model Rules of Professional Conduct of the American Bar Association.1 Rule 1.7 of the Model Rules of Professional Conduct provides some guide- lines to multiple representation. It provides in pertinent part: ER 1.7 Conflict of Interest: General Rule

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