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Insurer Liability for Retained Counsel's Malpractice: Causes of Action, Standards of Care, and Insurer Remedies

Recording of a 90-minute CLE video webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Tuesday, November 7, 2023

Recorded event now available

or call 1-800-926-7926

This CLE course will examine how and when an insurer is liable for the malpractice of defense counsel that an insurer selected to represent its policyholder. The panel will also address when retained counsel's malpractice may lead to claims for extra-contractual bad faith damages. The program will also review when the insurer itself may have direct claims against retained counsel for negligence.

Description

When an outside lawyer retained by an insurer to represent its policyholder commits malpractice, courts differ about whether the insurer may be vicariously liable for the retained attorney's malpractice, or whether retained counsel is a true independent contractor for which the insurer is normally not responsible. Independent contractor status can disappear, however, if an insurer turns counsel into an extension of itself.

Even if an insurer is not vicariously liable for retained counsel's malpractice, the insurer may be directly liable to the policyholder for breaching its own duty to defend, for example by retaining unqualified counsel, failing to supervise or monitor the case, refusing to fund proper investigations and experts, or providing inadequate resources to rebut the plaintiff's claims. The standard of care to which an insurer is held remains under debate.

How these issues are resolved affects who can sue and recover from the retained counsel.

Listen as our experienced panel guides counsel for insurers and counsel for policyholders through this complex area of liability.

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Outline

  1. Overview
    1. Finding a duty to defend
    2. Rights and duties – three sides to the story
    3. Breach of duty to defend -- policyholder suits against insurers for malpractice of retained counsel
    4. Practical considerations
  2. Policyholder’s perspective
    1. The tripartite relationship
    2. Selection of defense counsel
    3. Who “controls” the defense?
    4. Independent counsel and private counsel
  3. Litigation against defense counsel
    1. Agency and vicarious liability
    2. Independent contractor
    3. Section 12 of the Restatement of Insurance Liability

Benefits

The panel will review these and other key issues:

  • What is the role of outside counsel guidelines in liability?
  • How much control of outside counsel by the insurer is too much control?
  • Can the insurer ever be vicariously liable?

Faculty

Conley, Michael
Michael Conley

Principal
Offit Kurman

He represents policyholders with claims against insurance companies. His insurance coverage law experience includes...  |  Read More

DeMarco, Eduardo
Eduardo DeMarco

Partner
Kennedys

 Mr. DeMarco is a Partner in the firm’s Basking Ridge office. He focuses his practice in the areas of...  |  Read More

Dunham, Tamiko
Tamiko A. Dunham

Partner
Nicolaides Fink Thorpe Michaelides Sullivan

Ms. Dunham has extensive experience counseling domestic and London-based clients on novel and complex issues involving...  |  Read More

Lippa, Alison
Alison V. Lippa

Senior Counsel
Nicolaides Fink Thorpe Michaelides Sullivan

Ms. Lippa has over 25 years’ litigation experience, including in the representation of insurers in state and...  |  Read More

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