Summary
Part 8 - Manual for lawyers representing insured defendants
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Extract
Settlement issues.
A Defense Lawyer Need Not Handle Settlement Issues
Today, most liability carriers reserve control of settlement to their claims professionals, at least initially. This is their right and also is efficient. It would be ridiculously expensive and essentially pointless to require lawyers to negotiate, review or otherwise participate in all settlements, most of which involve small sums and clear liability. Nor is lawyer involvement contractually required. Neither defense clauses nor settlement clauses in standard insurance contracts obligate insurers to use lawyers. These clauses do not mention lawyers at all. Carriers use lawyers to defend lawsuits because only lawyers can practice law, not because liability contracts say they must. No rule of professional responsibility requires an insurance defense lawyer to handle settlement issues. Claims professionals handle the vast majority of liability claims before defense lawyers are called in. They can continue to do so thereafter without stepping on defense lawyers' toes. A defense lawyer who is wholly excluded from the settlement process can have few settlement-related duties to the clients. The only certain duty is that of making sure that the clients understand the lawyer's limited role. A lawyer can satisfy this duty simply and efficiently by sending a form engagement letter to the clients when the lawyer is retained. A defense lawyer who has been excluded from settlement issues may nonetheless be confronted with them by a plaintiff's attorney who wants to settle. That defense lawyer has a simple and proper course. Tell the plaintiff's attorney to contact the claims professiona...See the full content of this document
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