In December 2011 an Oklahoma advisory opinion held it was permissible for a represented party to sign a release and hold harmless agreement with language agreeing to indemnify another party for medical bills, medical liens, and government claims as part of a settlement. However, the advisory opinion held it unethical for the represented party’s counsel to also sign the agreement because counsel would be acting as a guarantor for the debts and obligations of his or her client. The opinion went further holding that it is even unethical for a lawyer to ask opposing counsel to sign a hold harmless, indemnification, or guaranty agreement pertaining to client debts. The rationale behind the ruling is premised in predominant part on Rule 1.8(e) of the Oklahoma Rules of Professional Conduct which provides: (e) A lawyer shall not provide financial assistance to a client in connection with pending or contemplated litigation, except that: (1) a lawyer may advance court costs and expenses of litigation, the repayment of which may be contingent on the outcome of the matter; and (2) a lawyer representing an indigent client may pay court costs and expenses of litigation on behalf of the client.
As a result of settlements, counsel for many defendants were asking plaintiffs and their lawyers to indemnify the defense for all medical bills, medical liens, and government claims to shift liability for the Medicare Secondary Payor Act (“MSPA”) which allows the federal government to prosecute subrogation claims for double damages against both the attorney for the plaintiff and defendant for a failure to properly set aside proceeds of a settlement for future medical expenses.