A single woman may occasionally sip a vintage wine at a linen draped, candle lit dinner table across from a handsome man – wise, witty, wealthy – and wonder: “Could this possibly be the man that I want visiting our children on week-ends?” (Rita Rudner)

Establishing trusting human relationships can be important and difficult. A defendant who gets sued in a serious civil liability lawsuit may risk the loss of everything it took a lifetime to build and often entrusts unknown insurers and their lawyers to save them from utter disaster – insurers and lawyers who will never to be seen again, when this lawsuit is over. Developing trust among the policyholder, the insurer, and their mutual lawyer is always a challenge because the three participants rarely have exactly the same agenda, which may lead to troubling conflicts of interest. Learning if such conflicts of interest exist and resolving them is a major focus of this website. Simple and efficient tools available here are written Questionnaires that policyholders may send to an insurer and their lawyers to help to get to know one another, sort of like an internet chat before deciding to get together for a potentially serious date. So as not to take sides, insurers and dependent counsel may ease the task of responding to a Questionaire by consulting Annotated versions of the Questionnaires that cite legal authorities to support each question, equally available here.

DutytoDefend.com collects and organizes the law governing a liability insurance company’s obligation to defend its policyholder in civil lawsuits and to settle those lawsuits, collects and organizes the law governing lawyers’ ethical obligations to policyholders, and suggests simple steps that policyholders and plaintiffs can take to try to get claims settled promptly and generously. A goal of this site is to jumpstart legal research or policyholders, plaintiffs, insurers, and their respective lawyers and implement that research to achieve that they usually want most – to get the stressful, distracting, and expensive lawsuit finished, so they can get back to their lives!

This body of law develops in three separate but related tussles: 1) a liability dispute by an injured plaintiff against a defendant/policyholder that is usually governed by tort law; 2) a coverage contest between a liability insurer and its policyholder that is usually governed by contract law; and 3) an ethical imbroglio for the insurer’s lawyer that is governed by Canons of Ethics. For clarity, lawyers who are selected and directed by the insurer are here identified as dependent counsel, while their counterparts who are selected and directed by the policyholder are called independent counsel. These monikers distinguish where the lawyer’s loyalty lies and emphasize the close financial relationship that usually exists between an insurer at its panel of dependent counsel. While the liability dispute and the coverage contest can each occupy as much as five years to resolve, dependent counsel’s ethical imbroglio must be resolved in as little as 30 days, the time allotted for a policyholder to respond to a plaintiff’s complaint.

While the plaintiff and the policyholder oppose each other in the liability dispute, they often share the same goals in the coverage contest and the ethical imbroglio, which they may properly pursue by cooperating with each other, provided that do not improperly collude. The plaintiff may properly plead into coverage. Both the plaintiff and the policyholder may also properly testify into coverage and develop admissible evidence relevant to the coverage contest and the ethical imbroglio.

When an injured plaintiff sues a defendant who has liability insurance, both of the plaintiff and the policyholder make separate but related claims to the defendant’s insurer. Usually, both the plaintiff and the policyholder want some of the same things: prompt and equitable resolution of the injured plaintiff’s liability dispute so that they can both get on with their lives without the stress of litigation. The plaintiff makes a third-party claim to the insurer for payment of damages caused ty the policyholder’s alleged tort. The policyholder makes a first-party claim against the insurer for payment of the costs of defending and indemnifying the plaintiff’s liability dispute. When a policyholder notifies an insurer of a plaintiff’s claim, the insurer is required by regulations to immediately respond in writing to both of these claimants with a simple “No”, “Maybe”, or “Yes”, with full particulars. “No” is easy to recognize as the insurer emphatically denies the entire claim and encourages the claimant to complain to the Department of Insurance. “Maybe” can be confusing as it often accepts part(s) of the claim, denies other part(s), and defers making any firm decision. “Yes” accepts the entire claim, but is usually fraught with uncertainty because insurers almost never comes right out and expressly say “Yes”. Instead, “Yes” is often merely implied in the law by the insurer failing to say “No” or “Maybe”. The most common form of an insurer saying “Maybe” occurs when it agrees to defend its policyholder but issues a reservation of rights letter explaining that it may later deny coverage to its policyholder and to the plaintiff.

Unless the plaintiff’s claim is promptly resolved at no cost (except a modest deductible) to the policyholder, potential conflicts of interest almost always develop among the insurer, the plaintiff, and policyholder, regardless of whether the insurer responds with a “Yes”, a “Maybe”, or a “No”. As a result, complex potential conflicts of interest may develop for dependent counsel who represents two clients with potentially conflicting interests, the liability insurer and the policyholder.

Not all potential conflicts of interest necessarily stymie the participants. But the existence of any disqualifying conflict of interest may shift control of the policyholder’s defense and/or settlement from the insurer to the policyholder. While the insurer usually has the contractual right to control the policyholder’s defense and settlement of the lawsuit, unresolved conflicts of interest may entitle the policyholder to seize control If dependent counsel cannot ethically represent the policyholder, the insurer must fulfill its promise to defend by paying for independent counsel, selected and directed by the policyholder. Much of this website is devoted to the battles that often ensue among the policyholder, the plaintiff, an insurer, and dependent counsel for control of the defense and settlement.

Since dependent counsel must resolve the ethical imbroglio within 30 days, they are vulnerable to ethical lapses, discipline, disbarment, civil liability, and expungement of attorneys fees. Thus, resolution of conflicts of interest usually starts by asking dependent counsel to comply with the Canons of Ethics to fulfill fiduciary duties always owed by a lawyer to the client.

Potential conflicts of interest may be easily resolved by fleshing out factual and legal details of the relationships of the participants. Both liability insurers and their dependent counsels are required by regulations to analyze potential conflicts of interest and make written disclosure of the analysis to the policyholder. Dependent counsels may also be required to obtain the policyholder’s informed written consent to accept employment by the insurer to represent the policyholder.

If an insurer or its dependent counsel have not taken this initiative, the policyholder may simply ask – in writing – for clarification of the facts and the law that govern such conflict situations and insist upon supportable responses – again in writing. The Questionnaires available here make asking easy. The editor’s practical experience teaches that sending Questionnaires either produces detailed conflict of interest information or alternatively produces prompt and generous settlements. While responsible insurers and ethical lawyers have nothing to fear from Questionnaires, others may be reluctant to respond. Receiving a Questionnaire requires a liability insurer and dependent counsel to make a public record of a conscious choice to: 1) tell the truth; 2) lie; 3) not respond; or 4) settle the liability dispute promptly and generously at no cost to the policyholder so as to defuse all potential conflicts of interest.

When liability insurers or their dependent counsels fail to take the initiative to make required disclosures, the policyholder may expressly withhold consent and authority for dependent counsels to represent the policyholder until the lawyer complies with the Canons of Ethics.

DutytoDefend.com is a self-help legal research resource with over 120 objective memoranda of law, over 90 definitions of terms, about 35 model legal documents, about 40 highly opinionated practice pointers, and a few Action Guides for do-it-yourselfers. Readers may left-click the mouse on terms that appear in red to hyperlink to a definition or a related article. With so many legal research resources available here, readers may find materials by browsing through the Table of Contents for Questionnaires, Action Guides, Memoranda of Law, Model Documents, and other resources. Most posts may be downloaded in Word or WordPerfect by clicking on a link as the end of each article.

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