Law, College of
Nebraska Law Bulletin (Selected Issues)
Date of this Version
11-11-2021
Document Type
Article
Citation
Nebraska Law Bulletin (November 11, 2021)
Abstract
The tripartite relationship between the insured, insurer, and appointed defense counsel poses inherent conflicts of interest and ethical dilemmas. All parties are affected by the problems arising out of the relationship. The insured is in a vulnerable position when they are denied loyal representation and are threatened with financial ruin. Special attention must be placed on the insurer’s obligations to its insured, including completing a reasonable and proper investigation of the claim, providing a defense if the potential for liability exists, timely effecting a reasonable settlement, and giving equal consideration to the insured’s interest.
On the defense counsel’s side, the counsel must identify potential conflicts of interest before agreeing to defend the insured and abide by the ethics rules governing insurance defense counsel. Further, adopting the One-Client Theory may help attorneys reduce such conflicts. At the end of the day, adhering to the duties owed and avoiding conflicts of interest protects everyone’s interest—the injured human, the policyholder who is dragged into litigation, the attorney whose reputation and business is on the line, and the insurer’s credibility and financial stakes.
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