Does my defense lawyer represent my insurance company or me?
In most litigation, lawyers hired under an insurance policy will represent the defense. We sometimes get calls from defendants upset with their lawyers, or have questions about their lawyers’ actions, or loyalties. Here’s how the attorney-client-insurance company relationship is supposed to work.
The insurance contract provides for a defense
For example, with an auto insurance policy, the insurance company will hire lawyers to defend the insured against a claim. That means that if you hit someone else with your car, the insurance company will hire counsel for you. You may think that the lawyer works for the insurance company. In some instances, the lawyer might work at a “captured” firm, so that could be technically true. Usually, the lawyer is part of an outside law firm that has a business relationship with the insurance company. The insurance company pays the lawyer to represent you, the client. It’s tempting to think that when the insurance company pays to defend you, the lawyer favors the insurance company’s interests over the client’s interests. So, what exactly are a lawyer’s ethical duties to the client?
A lawyer owes duties to their client, regardless of who pays the bills
In Georgia, a lawyer owes duties to their client, period. And it doesn’t matter who is paying the lawyer’s bill. Rule 1.8(f) says that a lawyer cannot accept payment from a third party for the client’s legal bills unless three things happen. First, the client must consent. Second, there can be no interference with the lawyer’s independent professional judgment on behalf of their client. And third, the lawyer must protect the client’s confidential information, per Rule 1.6.
But this can put the defense lawyer in an awkward position. Lawyers owe duties to their client, but they want to make the insurance company happy, too. If the insurance company isn’t happy, it might refuse to pay all of the bills, or not hire the lawyer again. Law firms are a business, too, and face the same business pressures.
Plaintiffs’ lawyers often argue that defense lawyers are more interested in protecting, or continuing to bill, the insurance company rather than protecting their actual client. But as the client, you have a say-so in how the litigation goes. If you admit fault, your lawyer cannot, or at least should not, tell you to lie. If you don’t want to go to trial, but you feel like your lawyer is forcing you to, consider putting your concerns in writing to your lawyer and your insurance company.
In what other contexts would this situation come up? In addition to the above auto insurance example, consider professional liability or malpractice insurance claims. A former client accuses a lawyer of malpractice, and the insurance company hires defense counsel for the lawyer. Here, the defense lawyer represents the lawyer-client, not the insurance company. And, subject to the terms of the insurance contract, the lawyer-client has the ability to influence the defense, based on the potential exposure and the conduct at issue. If the amount of the malpractice damages exceed the available limits of coverage, then the insured lawyer-client should hire personal “excess counsel,” to make certain that their interests are being protected. Chandler & Moore Law attorneys often serve as excess defense counsel to lawyers and firms across Georgia.
For a similar discussion about the ethical propriety of an attorney defending a client pursuant to an insurance contract when the attorney simultaneously represents a company in an unrelated matter and that company claims a subrogation right in any recovery against the defendant client, you should review the Georgia Bar’s Formal Advisory Opinion 05-11.