Dependent Counsel Is Beholden To The Insurer


California law has long recognized that dependent counsel is beholden to the insurer, as a client. In contrast, independent counsel is not. The difference between dependent and independent counsel is that independent counsel represents only the policyholder while dependent counsel represents the interests of the insurer and the policyholder.[1]

Dependent Counsel

Dependent counsel are regularly hired by insurers and rely upon the continued favor of liability insurers for their continued financial well being. If dependent counsel displeases an insurer only once, the firm risks losing not just one case, but an entire line of business. Disloyalty to the insurer by dependent counsel may destroy careers and fortunes. Independent counsel has no realistic expectation of ever being hired by the insurer.

Dependent counsel represents the insurer and the policyholder, is hired by the insurer and takes direction from the insurer.[2] In contrast, independent counsel represents only the policyholder, is selected by the policyholder and takes direction only from the policyholder.[3]

“[D]efense counsel and the insurer frequently have a longstanding, if not collegial, relationship.”[4] “As a practical matter . . . in reality, the insurer’s attorneys may have closer ties with the insurer and a more compelling interest in protecting the insurer’s position, whether or not it coincides with what is best for the insured.”[5] “This reality frequently gives rise to conflicts of interest between the insurer and its insured.”[6]Insurance companies hire relatively few lawyers and concentrate their business. A lawyer who does not look out for the Carrier’s best interest might soon find himself out of work.”[7] Dependent counsel, “who typically has a long-standing relationship with the insurer and none with the insured (including little prospect of future work), may be forced to make ‘numerous and varied’ decisions that could ‘help one of his clients concerning insurance coverage and harm the other.’”[8]

“Where an insurer is called upon to defend its insured, the attorney retained by the insurer may have a compelling interest in perfecting the insurer’s position, whether or not it coincides with what is best for the insured.”[9] “Since it is almost unavoidable that, in the course of investigating and preparing the insured’s defense to the third party’s action, the insured’s attorney will come across information relevant to a coverage or similar issue, it is quite difficult for an attorney beholden to the insurer to represent the insured where the insurer is reserving its rights regarding coverage.”[10]

Both dependent counsel and the insurer have a duty to analyze conflicts of interest and make written disclosure of them to the policyholder.[11]

Independent Counsel

The moniker “independent” denotes that the lawyer is independent of and owes no duties to the insurer. “[W]e find that the compelling need for Cumis counsel to remain free from the oftentimes subtle ethical dilemmas and temptations that arise along with conflict in joint representations prohibits [independent counsel] from having any duty to the insurer. . . . Cumis counsel is under no duty to the insurer to investigate or make determinations regarding how the case will be handled.”[12]

“The Cumis line of cases evolved out of express concern that counsel representing the insurer as well as the insured might prejudice the insured’s coverage and liability positions by favoring the insurer’s coverage position. . . . [A]n attorney in actual trial would be tempted to develop the facts to help his real client, the [insurer], as opposed to the Insured, for whom he will never likely work again. . . . A lawyer who does not look out for the [insurer’s] best interest might soon find himself out of work. . . . [T]he Cumis decisions [was] intended to eliminate the ethical dilemmas and temptations that arise along with conflict in joint representations, and that they accomplished this through mandating the insured’s right to Cumis counsel that represent only the insured.”[13] “In California, an attorney may usually, under minimum standards of professional ethics, represent dual interests as long as full consent and full disclosure occur.”[14]

[1] See, Difference Between Dependent Counsel and Independent Counsel at

[2] See, Dependent Counsel Always Represents the Insurer at

[3] “Cumis counsel . . . represents the insured, not the insurer.” (Assurance Co. of America v. Haven (1995) 32 Cal.App.4th 78, 83 (Haven).) “Cumis counsel represent solely the insured.” (Employers Ins. of Wausau v. Albert D. Seeno Const. Co. (ND Cal. 1988) 692 F.Supp. 1150, 1157 (Seeno).)

[4] Gulf Ins. Co. v. Berger, Kahn, Shafton, Moss, Figler, Simon & Gladstone (2000) 79 Cal.App.4th 114, 131.

[5] Purdy v. Pacific Automobile Ins. Co.(1984) 157 Cal.App.3d 59.

[6] Bogard v. Employers Casualty Co. (1985) 164 Cal.App.3d 602, 609.

[7] San Diego Navy Fed. Credit Union v. Cumis Ins. Society, Inc. (1984) 162 Cal.App.3d 358, 364.

[8] Long v. Century Indemnity Co. (2008) 163 Cal.App.4th 1460, 1469 (Citation omitted).

[9] Rose v. Royal Insurance (1991) 2 Cal.App.4th 709, 717.

[10] Haven, supra, 32 Cal.App.4th at 87.

[11] See, Duty to Analyze Conflicts at

[12] Haven, supra, 32 Cal.App.4th at 88-89.

[13] Seeno, supra, 692 F.Supp. at 1157-1158.

[14] Lysick v. Walcom (1968) 258 Cal.App.2d 136, 147; See, also Ishmael v. Millington (1966) 241 Cal.App.2d 520, 528; Industrial Indem. Co. v. Great American Ins. Co. (1977) 73 Cal.App. 3d 529, 537.

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