Frequently asked questions.

• Position: Part 1 - Manual for lawyers representing insured defendants

This chapter contains focused answers to questions defense lawyers often encounter when faced with problems that challenge their professional responsibilities. Each answer also cites the section(s) of this guide where relevant issues are discussed at greater length.

* Has the issue of who a defense lawyer represents been decided as a matter of law in my state?

Cases in many states hold that a defense lawyer represents a policyholder as a sole client or a policyholder and an insurance carrier as co-clients. Although most have endorsed the two-clients view, the number supporting the one-client view is increasing. No state appears to endorse the view that a defense lawyer represents an insurance carrier alone. A state-by-state breakdown is in Chapter II.

* Can I use a retainer agreement to determine whether I will represent only an insured, only an insurance carrier, or both at once?

Most likely. All states recognize that attorney-client relationships are consensual. Consequently, like any other lawyer, an insurance defense lawyer can use a retainer agreement to fix the identity of his or her client(s). Using a retainer agreement also is likely to avoid problems down the road by informing the carrier and the policyholder about the lawyer's responsibilities to each. See Chapter XI, Appendix of Forms.

* If I represent both the insured and the carrier as clients, can I take instructions regarding the defense from the carrier's claims professional?

Yes. The insurance company is contractually entitled to control the defense, and most defense lawyers look to carriers, not insureds, for marching orders. To establish the propriety of insurer control firmly and to avoid problems down the road, it is wise to use the retainer agreement to memorialize the understanding that the lawyer will look to the carrier for instructions. For a longer discussion of control in the tripartite relationship, see Chapter II.

* If I represent only the insured as a client, can I take instructions regarding the defense from the carrier's claims professional?

Probably. As a legal matter, most jurisdictions that have endorsed the one-client view nonetheless recognize and enforce a carrier's contractual right to control the defense. Even in one-client states, insurers in fact give instructions to defense lawyers every day. The legal theory supporting the practice of insurer control in one-client states is undeveloped. The chief unresolved issue concerns how one circumvents the rule that a third-party payer may not interfere with a lawyer's representation of a client. See Chapter IX.

* After being hired by a carrier, must I separately obtain an insured's consent before beginning a representation?

No. The carrier is authorized to retain you for the insured. However, it is good practice to send both clients a letter confirming your engagement and setting out its basic terms, especially if, as usually is true, the carrier expects you to follow its litigation management guidelines. See Chapter II..

* When representing a policyholder who may have affirmative claims against another person, what should I do?

Generally speaking, a defense lawyer's job is to minimize a claim against a policyholder, not to help a policyholder recover money from someone else. A defense lawyer has no duty to prosecute a policyholder's affirmative claims.

However, a defense lawyer who knows that a policyholder may have a cause of action against someone else should alert the policyholder and suggest the retention of separate...