Assignment of Rights
Some Rights May not Be Assigned
The Supreme Court, moving in a new direction, considered Arizona case law that generally allows the assignment of unliquidated legal claims except those involving personal injury.
The broad prohibition on assignment exemplified the common law view that litigation was vexatious or otherwise socially undesirable. The reasoning was stated by Lord Coke in 1613:
And first was observed the great wisdom and policy of the sages and founders of our law, who have provided that no possibility, right, title, nor thing in action, shall be granted or assigned to strangers, for that would be the occasion of multiplying of contentions and suits, of great oppression of the people. [Lampet’s Case, (1613) 77 Eng. Rep. 994, 997 (K.B.)].
The Arizona Supreme Court noted that as courts became more accessible and litigation a more accepted means for resolving disputes, the prohibition on assignment gradually became the exception rather than the rule. However, one class of unliquidated claims was excluded from the emerging rule of assignability: personal injury claims.
Since Roman times, bodily injury claims were considered “personal” to the claimant and could not be asserted by others. Many courts concluded that whether a claim would survive the claimant’s death should also determine whether it could be assigned during the claimant’s life and applied this test to both personal injury and other claims. This “survivability” test did not itself survive in Arizona after 1955, when the legislature enacted a statute providing for the survival of most causes of action, including personal injury claims.
The state Supreme Court subsequently endorsed and expressly relied on public policy considerations in reaffirming the rule against assignment of personal injury claims.[1] Public policy considerations have also guided courts in determining the assignability of claims not involving personal injury.
For example, the court of appeals has held that legal malpractice claims cannot be assigned. The principal policy consideration offered has been deference to the attorney-client relationship. The courts did not eAxpress fear that assigning legal malpractice claims would increase trafficking in lawsuits. The current principles under Arizona law for determining whether an unliquidated claim may be assigned can be summarized as follows:
claims generally are assignable except those involving personal injury;
the legislature may specify whether particular claims are assignable; and
absent legislative direction, public policy considerations should guide courts in determining whether to depart from the general rule.
The cases prohibiting assignment of legal malpractice claims, according to the Arizona Supreme Court, do so because of the “uniquely personal” relationship between attorney and client, which gives rise to a “fiduciary relation of the very highest character.”
ASSIGNMENT OF RIGHTS AGAINST AGENT
The relationship between an insurance agent and client, while certainly important, differs from that between an attorney and client in several critical respects. Attorneys are fiduciaries with duties of loyalty, care, and obedience, whose relationship with the client must be one of “utmost trust.” Insurance agents generally are not fiduciaries. The insurance agent only owes a duty of reasonable care, skill, and diligence in dealing with clients.
Similarly, although clients share personal information with both their insurance agents and attorneys, they typically share much less with their agents.
While clients often inform their agents about their medical history, financial information, prior claim history, and personal habits, they provide their attorneys more extensive or sensitive information about their private and public conduct, including activities that may expose them to civil or criminal liability.
Attorney-client confidentiality protects broader interests than does insurance agent–client confidentiality. It protects the public interest in accessible legal advice by allowing people to consult their attorneys without fear of retribution. It also ensures that clients are effectively represented, which, in criminal cases, is essential to defendants’ constitutional right to assistance of counsel. Once attorneys receive information, they are also bound by stricter confidentiality duties than are insurance agents. Attorneys may disclose information only to prevent client crimes.
Insurance agents, by contrast, are statutorily allowed to disclose client information in 17 different circumstances, including when an affiliate seeks the information for marketing purposes.