99-1.

• Case Date: January 15, 1999
• Court: Alaska

Alaska Ethics Opinion 1999. 99-1. Ethics Opinion No. 99-1 Ethical Obligation of Attorney When Insurer Requests Attorney to Send Billings to Outside Auditor Without Informed Consent of Insured.The Ethics Committee has been asked to address the ethical issues implicated when an attorney, who has been retained by an insurer to defend its insured, is asked by the insurer to send detailed billing records describing the legal services provided on behalf of the insured to an independent auditor hired by the insurer to review defense counsel billings. For purposes of this opinion, the Committee assumes, first, that the attorney's billing records contain confidences and secrets of the insured, as well as matters covered by the attorney work-product doctrine, and, second, that the auditor is hired by the insurer solely to review attorney bills and is not involved directly in litigation management. The Committee concludes that the attorney's compliance with the insurer's request to send billings to the auditor is ethically problematic and that the attorney may not provide confidences and secrets in billing records to an outside auditor without specific consent from the insured. Alaska Rule of Professional Conduct 1.6(a) requires an attorney to preserve the confidences and secrets of the client unless the client consents after consultation. The rule provides an exception for "disclosures that are impliedly authorized in order to carry out the representation." In the context of an attorney retained by an insurer to represent an insured, the exception ordinarily covers disclosures by the attorney to the insurer, because the typical insurance contract between the insurer and the insured states explicitly that the insurer may control the defense. See generally Ethics Opinion 89-3; CHI of Alaska v. Employers Reinsurance, 844 P.2d 1113 (Alaska 1993). However, the exception does not apply to disclosures to any third party, such as a billing auditor, when there is neither express nor implied consent from the insured for the disclosure. Disclosure of attorney-client privileged or work-product-protected materials to a third party, even one selected by the insurer, is problematic, because such disclosure may result in waiver of the privilege or protection. Whether disclosure of billing records to an auditor at the request of the insurer will...