Insurance defense counsel have unique and complicated professional responsibilities arising from their dual relationships with the insured who is being defended and the insurer who is providing the defense and must pay the judgment or settlement (assuming it is covered). William T. Barker & Charles Silver, Professional Responsibilities of Insurance Defense Counsel provides the only comprehensive treatment of this subject. States and scholars often have differing views on many issues, and this publication takes account of all significant lines of authority and all major scholarship. It provides detailed guidance for defense counsel retained by an insurance company as well as for the company itself, covering every step of the representation. From the formation of the attorney-client relationship(s), through the necessary initial communications with the insured, and into the trial or settlement that normally concludes the representation, this publication covers the gamut of complex issues that may arise in the course of the defense. It also examines the special issues affecting insurance staff counsel, the circumstances in which the insured is entitled to independent counsel, and the responsibilities and liabilities of independent counsel when representing the insured. While the publication provides a normative analysis of which rules in resolving these issues are preferable, it also offers approaches to comply with the diverse doctrines jurisdictions have adopted.
About the Authors:
William T. Barker is a partner in the Chicago office of SNR Denton, U.S., LLP with a complex litigation practice, concentrating in insurance law. He has been advising clients, litigating, writing, and speaking about insurance defense issues for over 20 years. He received a special award from the International Association of Defense Counsel for his work on insurance defense issues in the Restatement (Third) of the Law Governing Lawyers. He is also a co-author of William T. Barker & Ronald D. Kent, New Appleman Insurance Bad Faith Litigation, Second Edition, a member of the Editorial Board for New Appleman on Insurance Law, and an Adviser to the American Law Institute project on Principles of the Law of Liability Insurance. He is a member of the Board of Directors of the Association of Professional Responsibility Lawyers, a former member of the Editorial Advisory Board of the ABA/BNA Lawyers' Manual on Professional Conduct, and a member of the ABA Center for Professional Responsibility and of its Policy Implementation Committee.
Charles Silver holds the Roy W. and Eugenia C. McDonald Endowed Chair at the University of Texas School of Law, where he writes on and teaches civil procedure, professional responsibility, and health care law and policy. He is a leading academic authority on the professional responsibilities of insurance defense counsel and was one of the Reporters for the study of that subject undertaken by the International Association of Defense Counsel and the Defense Research Institute. In 2009, he received the Robert B. McKay Award from ABA Tort Trial & Insurance Practice Section for outstanding scholarship on tort and insurance law. He served as Associate Reporter for the Principles of the Law of Aggregate Litigation, published by the American Law Institute in 2010.
The highlights or each chapter of the publication are as follows:
Ch. 1: Background: Development of Liability Insurance and Controversies Over Defense Counsel--A brief history of insured representations and description of the most prominent controversies regarding defense lawyers' duties.
Ch. 2: Context: The Liability Insurance Policy--Examines the structure of a liability insurance policy and the traditional understandings regarding insurer rights to control the defense. Analyzes challenges that have been offered to those traditional understandings. Argues that a fair liability insurance bargain supports the traditional understanding, supporting that argument by analysis of case law showing that, given legal reforms in the 1970's and 1980's, policyholders have not suffered significant problems from the traditional understandings.
Ch. 3: Retention of Insurance Defense Counsel--Examines the formation of defense counsel's attorney-client relationship with the insured and the relation between the retainer agreement for defense counsel and the insurance policy pursuant to which the defense is provided.
Ch. 4: Whom Does Insurance Defense Counsel Represent?--Examines the history and significance of the single client/dual client debate and the appropriate analysis of that issue under the Restatement (Third) of the Law Governing Lawyers (and the similar law in almost all states), which would indicate that there would be dual clients under the usual facts. Analyzes the cases in some jurisdictions and the arguments by some scholars that dual representation is precluded or limited by special consent requirements. Includes chart of jurisdictional positions on this issue. Discusses the ability of a nonclient insurer to sue defense counsel for malpractice.
Ch. 5: Defense Counsel and the Duty of Loyalty --Examines conflicts of interest and the duty of loyalty under agency law and the Rules of Professional Conduct and scholarly arguments for modification of that duty in the insurance defense context. Considers sources of conflicts in full-coverage cases, excess exposure cases, and contested coverage cases. Discusses the respective roles of insurance law and professional responsibility law in addressing conflicts. Critiques cases and scholarly arguments suggesting that, in dual-client representations, the insured is the "primary" client.
Ch. 6: When Does the Policyholder Have a Right to Independent Counsel?--Notes that the Rules of Professional Conduct forbid a conflicted defense and that insurance law requires the insurer to pay for an independent defense when dual representation would create a conflict. Examines in detail the various ways in which a disabling conflict may or may not be created, by coverage issues, cross-insureds, multiple insureds with inconsistent defenses, UM/UIM claims, differential policy limits, insured's affirmative claims, excess exposure, punitive damages, recoupment, burning limits policies, etc. Considers the minority rule giving a right to independent counsel whenever coverage is disputed and the New Jersey rule holding that a conflict converts the duty to defend to a duty to reimburse. Analyzes assigned counsel's duties when insured may have rights to independent counsel and the appropriate choice of law regarding rights to independent counsel.
Ch. 7: Insurer Use of Staff Counsel--Discusses the background and history of insurer use of staff counsel to defend insureds. Examines majority and minority positions on whether this is legally permissible. Analyzes propriety of use by staff counsel offices of names similar to those of outside law firms. Considers appropriate conflict checking procedures for staff counsel offices, depending on the structure of the particular staff counsel program.
Ch. 8: The Scope of Defense Counsel's Representation: Discusses the ways in which the scope of a representation is defined and the implications that scope has for the lawyer's duties. Explains that, absent contrary agreement, defense lawyers solely defend liability suits. Analyzes the ways in which the scope of representation affects conflict of interest analysis and the duty of care. Considers what a lawyer must explain to an insured about the scope of the representation.
Ch. 9: Defense Counsel's Duties to Communicate: Generally examines defense counsel's duties to communicate and specifically analyzes in detail counsel's initial duties to communicate with the insured at the outset of the representation. Analyzes the general rules about communication in the course of the defense in full-coverage cases and references discussions in other chapters of communications in excess exposure and contested coverage cases. Includes sample forms of letters to the insured at the outset of the representation and when certain issues arise during the representation.
Ch. 10: Confidentiality and Sharing of Information among Policyholder, and Defense Counsel: Examines the duty of confidentiality generally and the circumstances in which there is implied authority to disclose. Notes the general rules in joint representations that there is no confidentiality between clients on matters relating to the representation and no sharing of information not relating to it. Analyzes special rules applicable where information may affect both defense and coverage or where secrecy is requested, and critiques ABA ethics opinion 08-450 on that subject. Considers the privilege implications of carrier-assigned counsel sharing information with carrier and policyholder. Analyzes issues arising from outside bill review.
Ch. 11: Claim Representative Involvement in Defense Planning and Decision Making: Discusses defense counsel's routine communications and status reports and consultation with adjuster about investigation, case planning, strategy, tactics, and expenditures. Argues that company budgetary decisions do not interfere with defense counsel's duty of competent representation. Analyzes ways defense counsel may deal with company guidelines and refusals to authorize recommended services. Argues that involvement of the adjuster neither interferes with counsel's independent judgment nor relieves counsel of the obligation to exercise that judgment. Examines insurer's liability for defense counsel's errors.
Ch. 12: Watching for and Reacting to Possible Conflicts between Companies and Policyholders or between Co-Client Policyholders: Explains how to watch for conflict clues and examines handling of actual conflicts when they arise. Analyzes handling of potential conflicts, dealing with excess or noncovered exposure, and dealing with the insured's consent or resistance to settlement.
Ch. 13: Compensating Defense Lawyers and Reimbursing their Expenses: Discusses the basic economics and ethics of attorneys' fees generally and specifically analyzes the economics and ethics of flat fees, arguing that use of such fees is consistent with the duty to defend. Analyzes certain problems that can arise with reimbursement of counsel's expenses.
Ch. 14: Rights and Obligations When Policyholder Has Independent Counsel: Examines who has the right to select independent counsel. Analyzes what rights insurers have when dealing with independent counsel and the ethical obligations of independent counsel. Considers whether an insurer can sue independent counsel.
The publication also contains aids for researchers, including a Table of Cases, a Table of Statutes and an Index.
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