Is that &%#*@ liability insurer not paying?
Not paying the plaintiff to settle?
Not paying for the policyholder’s defense?
Not paying independent Cumis counsel? At full rates? Often enough?
Not paying a judgment?
Should the policyholder attack the liability insurer?
Should the policyholder attack the liability insurer’s lawyers?
A plaintiff and a defendant can win a civil lawsuit by utterly defeating the other. When the defendant has liability insurance, both the plaintiff and the defendant can win by properly cooperating to make the insurer pay – promptly and generously.
When there is no conflict of interest between the insurer and the policyholder regarding coverage, civil litigation is analogous to chess, the ancient Persian board game that simulates war. But when there is any conflict of interest between them, the complexity of the game triples. Because most cases settle and a liability insurer can sue its own policyholder to recover back a non-covered settlement, it can be as much as forty-nine times more important for the policyholder to win the liability insurer’s coverage challenge than it is to defeat the plaintiff’s claim. The following graph shows how the three related disputes play out in three different venues, that are governed by different rules, with shifting alliances, and occupy different time lines:
Tussle Venue Law Alliances Time
Liability One Tort Plaintiff vs. Policyholder, 5 yrs Dispute Venue Law Insurer, and Joint Lawyer
Coverage Second Contract Policyholder and Plaintiff 10 yrs Contest Venue Law vs. Insurer and its Lawyers
Ethical Third Canons Policyholder and Plaintiff 30 days Imbroglio Venue of Ethics vs. Insurer and its Lawyers
Many courts find the foregoing matrix to be complex, but it need not be. One court concluded: [T]he ethical dilemma thus imposed upon the carrier-employed defense attorney would tax Socrates.” “[M]ost courts hold that in conflict situations the insured has the right to independent counsel to conduct its defense and the insurance company has the obligation to pay the reasonable value of the defense conducted by independent counsel.”
Just as a policyholder (as witness), a liability insurer (as financier), and their common lawyer (as warrior) may properly cooperate with each other to gang up on a plaintiff in the liability dispute to protect their common interests, so equally the policyholder and the plaintiff may properly gang up on the liability insurer and its lawyers in the coverage contest and the ethical imbroglio to protect their common interests.
Just as men need not study biochemistry to appreciate the value of Viagra, so policyholders and plaintiffs who do not want to try to comprehend this arcane body of law, can make an insurer settle by simply sending a Coverage Questionnaire to a defendant’s liability insurer that has reserved its rights to later deny coverage and sending an Ethical Compliance Questionnaire to the reserving insurer’s lawyers.
 Hartford Acc. & Indem. Co. v. Foster 528 So.2d 255, 269, 273 (Miss. 1988).
 CHI of Alaska, Inc. v. Employers Reinsurance Corp., 844 P.2d 1113, 1116-17 (Alaska 1993).