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DTCI: A refresher in insurance defense client and company reporting

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PinkieBusy lawyers practicing in insurance defense law sometimes forget the basic tenets of the practice. This article is a refresher course for the seasoned civil defense practitioner and a primer for those new to the practice.

Client and company reporting

Reporting to the client may sound elementary, but there are horror stories about the lack of reporting client companies receive from counsel. Poor communications and non-diligence account for almost a third of grievances filed for alleged misconduct. (See Indiana Supreme Court Disciplinary Commission, 2008-2009 Annual Report, available at http://www.in.gov/judiciary/discipline.) The duty to the client and insurance company representative of timely and accurate reporting cannot be overlooked.

Client reporting starts after receipt of the assignment and after the details of the initial engagement are agreed upon. An acknowledgment letter sent upon receipt of the new assignment is the client’s assurance that his counsel received the matter, performed a conflict check, and agreed to the representation. Telephoning the new client helps overcome any of the client’s hesitancy to call counsel because of unfamiliarity with the legal process.

The initial communication should be in plain English and inform the client that you are his lawyer and that this and all future communications are protected by privilege. The initial communication also confirms proper service of process, should that not be obvious from the documents already in possession.

An acknowledgment to the insurance company representative assures him the lawyer received the assignment, his insured is now represented by counsel, and the record is (or soon will be) protected. A phone call to the insurance company representative promotes open communications from the start and serves as an opportunity to thank the representative for the business.

Review your acknowledgment practices. Electronic discovery and litigation hold letters have imposed new obligations about which clients need to be informed early and often. Electronic discovery raises the bar on initial communications – specifically the duty to preserve any electronically stored information and to ask about the retention policies of the client. Failing to take these necessary steps early on may lead to professional liability issues for the lawyer and discovery sanctions from the court.

Lastly, check to identify any conflicts that may lead to a waiver or preclude representation. If representation is precluded, then a phone call to the client or insurance representative followed by a letter declining the assignment is appropriate. It should be made clear that no attorney-client relationship was formed.

Litigation guidelines

Outside counsel must meet company reporting requirements defined in an insurance company’s litigation guidelines. The complexity of these guidelines varies from one page to several pages including indexes, definitions, and appendices. Review these guidelines with the insurance company representative.

An initial evaluation report may follow the receipt and analysis of any pre-suit file materials that the insurance company representative has compiled. The report may include the following: communications with your client, confirmatory communications with the company representative, communications with opposing counsel, any fact witness interviews, a site visit to the loss scene, description of any documents informally produced by opposing counsel, and whatever else the company representative ought to know about. The initial case evaluation should also set out theories of liability, damages presented, applicable defenses known to date, applicable law to be applied, possible alternative dispute resolution, discovery undertaken or recommended, evaluation based on the facts and evidence to date, and recommendations for future handling. Litigation guidelines usually allow 60 to 90 days from the case assignment for counsel to provide a preliminary case evaluation.

Status reports should be sent to the client and company representative after any significant development, including the following: a material change in the facts; the discovery of a new witness; substantial developments in the damages presented, whether mitigated or aggravated; a new expert witness; discovery responses received or discovery directed at the client; deposition testimony; summaries of records and documents; dispositive motions; the status of settlement negotiations; and any change in the gestalt of the case. Several of the aforementioned developments are best communicated by telephone, followed by a letter memorializing them.

Clients and company representatives will frequently ask counsel for recommendations on the future handling of the case. Clear, concise, and supported recommendations should be contained in your report. Alternatives and options should also be provided, even when unsolicited. Remember, it is not your case, but your client’s!

Effective communications include disclosing any reservations or adverse consequences that may follow from a key strategic decision. It also strengthens the trust between the lawyer, client, and company representative. Only after informed communications should decisions affecting the case be made, and the decision is to be in the best interests of the client.

Insurance defense lawyers may have to complete documents called for in the litigation guidelines, such as litigation action plans, discovery plans, and proposed budgets. The attorney representing clients through an applicable policy of insurance that provides for the defense of the insured must become familiar with the litigation guidelines and billing protocols for that particular company. Any applicable reporting dates or required reports should be calendared after the acknowledgment and acceptance of the assignment.

The practice of law is a service-providing industry. Noncompliance with company guidelines does not bode well for the attorney’s reputation. In some circumstances it can be interpreted as an indication of the value the lawyer places on the business.

Insurance defense work remains competitive in the legal services market. If the practitioner cannot take the time to adhere to company litigation protocols, then the lawyer should be neither upset nor surprised when the company takes its work elsewhere. Losing a source of business is certainly not worth any perceived benefits of haphazard compliance with mandated litigation guidelines.

Ethical obligations and tripartite relationship

The tripartite relationship is the cornerstone of insurance defense law practice. It is created by the insurance contract and the hiring of defense counsel by the insurer to defend the insured under the policy. The lawyer’s familiarity with ethical obligations to the client and the client’s insurance company, which may not coincide, can go a long way in safeguarding the insurance defense practitioner from running afoul of ethical obligations.

Several Indiana Rules of Professional Conduct pertain to the tripartite relationship and lead to ethical considerations. (See Indiana Professional Conduct Rules 1.1, 1.2, 1.3, 1.4, 1.6, 1.7, and 1.8. See also Cincinnati Ins. Co. v. Wills, 717 N.E.2d 151 (Ind. 1999).)

The most often cited rule leading to potential problems in the tripartite relationship is Indiana Rule of Professional Conduct 1.8(f)(2):

(f) A lawyer shall not accept compensation for representing a client from one other than the client unless:

(2) there is no interference with the lawyer’s independence of professional judgment or with the client-lawyer relationship; …

Indiana Rule of Professional Conduct 5.4(c) also provides:

A lawyer shall not permit a person who recommends, employs, or pays the lawyer to render legal services for another to direct or regulate the lawyer’s professional judgment in rendering such legal services.

In some circumstances, it is possible that the insurance company’s litigation strategy may be interfering with defense counsel’s judgment or defense counsel’s attorney-client relationship, thus impeding the lawyer’s ability to do his job. The keen practitioner recognizes this threat and should obviate it through the use of efficient communication with the client and company. In the event efficient communication fails to eliminate the conflict, the lawyer may be placed in the uncomfortable position of being unable to follow his own judgment.

The lawyer’s ultimate duty is to the client, the insured of the company, and not to the insurer. (See Indiana State Bar Ass’n Legal Ethics Comm., Op. 3 (1998). See also Indiana State Bar Ass’n Legal Ethics Comm., Op. 4 (1998) addressing the issue: May an Indiana attorney submit statements for insurance defense services to the insurance company’s outside audit company, which statements contain confidential or privileged information?).

Communicating with counsel, courts, and colleagues

Lawyers are communicators. When not communicating with clients and company representatives in pursuit of the cause, lawyers communicate with their learned adversaries, judges and court personnel, and, of course, colleagues. As members of this noble profession, lawyers are held to higher standards than are other members of the community.

Rule 22 of the Indiana Rules for Admission to the Bar and the Discipline of Attorneys is the oath of attorneys. The Indiana Rules of Professional Conduct contain a preamble titled, “A Lawyer’s Responsibilities,” at paragraphs 1-13. This is the code by which lawyers are to live and practice. (In addition, for lawyers practicing in Marion County, see Appendix A and B of Marion Circuit and Superior Court Civil Rules pertaining to the Commitment to Respect and Civility.)

Lawyers must continue to treat each other with the dignity and respect that the profession demands and human beings deserve. Certainly, heated disagreements with our adversary will take place – both in and out of the courtroom. But when the fireworks cease, it is good to remember that the lawyers may find themselves on the other side of the “v.” next time. Agreeing to disagree is healthy, but do not lose sight of the need to promote and practice civility in the practice of law.

Providing good service and managing expectations

A lawyer can wear many hats in the course of one client representation: advisor, advocate, and counselor. It is, among many other things, the lawyer’s ability to wear these hats and to promptly recognize and switch roles according to the task at hand that sets lawyers apart from other professions.

A lawsuit can be devastating for the client even if sufficient insurance coverage exists. Most clients have never been in a contested lawsuit and are unaware of how the legal process works. They are unaware of the time, effort, and resources that go into taking the case to trial by jury. The time demands associated with preparing for a civil jury trial will undoubtedly affect the client’s life. The lawsuit will likely take away time from the client’s family. It may consume time from the client’s job. It may lead to cancellation or adjustment in planned vacations. The addition of the unwelcomed and unanticipated stress can place a strain on the client’s already hectic life. Lawyers need to tell their clients all of this and explain to them in advance the rigors of civil litigation.

Timely, informative oral and written communications speak volumes about the level of service the lawyer provides to clients. Being open and honest with the client as to what the legal process entails, and the corresponding expectations placed on the client, will go a long way toward building an attorney-client relationship based on trust.

In some cases, the insurance company representative may have a misconceived expectation of the desired end result. The company representative may fail to appreciate detrimental evidence the case presents that makes it difficult, or even impossible, to achieve the hoped-for outcome. Communicating this information to the client and company representative – sometimes repeatedly – during the course of the representation should help to modify the company’s expectation. A lawyer well versed in the facts of a particular case should be able to evaluate the potential risk the case presents, including an evaluation of the exposure facing the insurer. For obvious reasons, this is very important information the company representative wants to know.

The insurance defense lawyer plays a vital role in civil defense litigation. The lawyer owes ethical obligations to his client and duties to report to the insurance company representative. Keeping your client and the insurance company representative well informed throughout the life of the lawsuit is important. It not only fulfills the lawyer’s duties and obligations under the tripartite arrangement inherent in an insurance defense practice, but practicing effective communications will enhance the lawyer’s reputation in the legal community.•

Elliott Pinkie is a partner with Hoover Hull LLP, in Indianapolis, and he is a member of the DTCI Trial Tactics Section. His practice focuses on civil litigation for the defense, including professional liability, premises liability, unique auto liability, retail liability, and long-term care liability. The opinions expressed in this column are those of the author.

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  1. Am I the only one who sees that the City is essentially giving away the MSA site AND giving millions to build new buildings on the site when this site would be the perfect place for the Justice Complex? Across from City-County, check; keeping it centrally located, check, etc. It's my understanding that the GM site must be purchased by the City from Motors Liquidation Company. STOP WASTING WHAT WE ALREADY HAVE AND OUR TAX DOLLARS! The Ballard Administration has not been known for it's common sense...never voted for him and never will!

  2. This guy sounds like the classic molester/manipulator.

  3. Louis D. Brandeis was born in 1856. At 9 years of age it would have been 1865. The Brandeis family did not own slaves. My source Louis D. Brandeis: A Life, by Melvin L. Urofsky.

  4. My name is Matthew Lucas Major, I recently went through a jury trial in Bloomington , In. It was the week of Feb 19-21. Although I have been incarcerated since August 5, 2014. The reason I 'am writing to you sir is on the 21 of February the jury came in with a very excessive and wrongful verdict of guilty on 6 child molesting charges against my daughter who was 9 at the time I was accused. I also had 2 other Felonies one of Intimidation and 1 of Sexual Vicarious Gratification. Judge Marc Kellam on the second day of trial gave me a not guilty on those 2 felonies. The jury was sent out during that time and when brought back Judge Kellam told them to not concern themselves with the 2 Felonies that he ruled on them. They were told to not let evidence they had already heard influence there verdicts. I never in my life touched any child sexually and definitely not with my own daughter. When I was arrested Detective Shawn Karr told me I would be convicted guilty just on my daughters word even without evidence. That's just what happened. my public defender did me so wrong he never once proved to the court and jury all the lies the child told, and Jeremy Noel my public defender could of proven the lies easily. The stories in Serenity's depositions and Forensic interview changed and were not consistent as Prosecutor Darcie Fawcett claimed they were. Yet my attorney never mentioned that. The facts that the child accused me of full penetration in her vagina and rectum was proven lies. Doctor Roberta Hibbard of Riley hospital in Indianapolis confirmed Serenity's hymen intact, no scars, no tearing, no signs of rape to her. Yet my attorney didn't use that knowledge . the DNA was all in my favor. I tell you I will spend my entire life in prison going through rape and beatings etc. even Judge Kellam abused his authority by telling the jurors to listen and believe what the prosecutors side in evidence like my daughters testimony. In one interview with the detectives my daughter got flustered with her mom and said on camera " I'm saying what you told me to mom"!! Yet Mr. Noel said nor did anything to even resemble a defense attorney. Judge Kellam allowed edited version of a taped conversation between the child and her mother. Also Judge Kellam allowed the Prosecutor too bring in to my case a knife found under my seat, the knife wasn't part of my case. She was allowed by my attorney and the judge to put a huge picture of it on the screen and huge picture of my naked privates in a full courtroom and open court. Ms. Fawcett says to jury see how easy Mr. Major could reach the knife and cut his Childs throat. Even though I had no weapons charge against these cases. This gave the jurors prejudice thought against me thinking I threatened her with that knife and how scared she would of been knowing i could get it and kill her. On my sentencing court March 19, 2014 my public defender told Judge Kellam he wish to resign from being my attorney and wished for the court to give me outside council to file a error to trial or appeal. We were denied. Now after openly knowing my public defender don't want to represent me he has to. Well when as parents we make our kids clean a room when they really don't wish to, well the child will but don't mean she will do a good job, that's where I'm at with Mr. Noel. please dont ignore mine and my families pleas for your help . we have all the legal proof you could need to prove Im innocent. Please dont make my spend years in prison innocent when you can fix this wrong. Im not saying Im a perfect man or that I was a perfect dad to my 2 children none of us are. Ive made some bad choices in life and I paid for them. But I didnt ever touch or rape my daughter . I love my children with all my heart. And now through needing attention and a ex-wife who told my granny several times she wish she could put me in prison to get me out of their lives. Well my ex finally accomplished her goal. Sad part is she is destroying our daughter with all this horrific lies and things she taught my daughter to say. My daughter will need therapist to ever hope for a chance of a normal life after what she had done to her by her mom and their side of the family. My daughter told everyone even on stand she had a dream months before i supposedly molested her in this dream I was molesting her and when I finally did it matched her dream perfectly. She admitted to watching movies about little girls being molested and watching U-Tube videos about child molesting all before it happened supposedly to her. Doesn't that sound very unusual that a non molested 9 yr old would need to know so much about being molested? The only reason I could think a 9 year old would need so much information is to be prepared to know what to say and be able to say how it felt what took place etc.. So when questioned by authorities she would be prepared. And there again sir if a parent is pre grooming a 9 year old child she would need intimate details . Like telling her daughter about a couple moles on my private area. The child admitted to sneaking my cell and looking many many times at nudes of me and my girlfriend even one where my penis was entering my girlfriends vagina. In that picture my moles are obvious. Yet when prosecutor showed everyone in court my privates and pictures of the moles she said the only way the child would know about them is if she saw them for herself. My attorney once again said nothing about the pictures my child saw. Or could a ex-wife be able to describe my moles to help her case against getting rid of me? I beg you help me. This is my very existence. Ive lost everything , a good job, a wonderful girlfriend, my freedom, but worse thing Ive lost is my children. They were my reason to get up every morning and strive to be better. The wonderful bond I had with my Serenity is gone. After this I would be afraid to even hug her for fear of what next can they do to me. I'm not afraid to tell you I sit here in this cell and try to hold back my tears. Everyone knows you cant show weakness in prison. My life has already been threatened here at Wabash Valley Prison. After only 3 days of arrival. I was tricked into signing a waiver now Im in G Block General Population with 6 child molesting felony charges. Mrs. Hart as a 18 year old I almost died hooked to machines in hospital almost 1 month and now I know that fear was childish compared to this . I cant help but put emotions in this, after all Mrs. Hart Im human and God help Me I never been more afraid in my life. I didnt hurt my little girl I didnt touch her sexually. As much as it shreds me and fills my mind what Im facing I worry more about my mom and granny because of their great love for me mam they are suffering so deeply. I aint done this things but my loved ones suffering right along beside me and If you take my case you will be in essence freeing them also. I sent momma this letter and asked her to email it to you. I'm scared I have been done so unjustly by our legal system and I need you to fix this and give me freedom. I ask you please don't just ignore my pleas. Here in America its nice to be able to trust our legal justice system, well they destroyed my and my loved ones trust in our justice system . And I'm trusting in You !!! My entire family is suffering this nightmare with me. My 77 year old granny had a stroke and isn't doing so well. My single mother that raised 3 kids alone is dying from Lupus and since my arrest has stayed so sick and weary. Our lives torn to peices by a government I was taught I could trust in. my momma has tried so many innocent project and wrongfully accused and cant get anywhere. please please help me. A quote from the late Nelson Mandela: To be free is not merely to cast off ones chains, But to live in a way that respects and enhances The Freedom Of Others. I have Faith in you and your clinic to cast my chains off and give me freedom I do deserve as a wrongfully accused Man, son, brother, father, friend. Matthew Major DOC# 246179 Cause # : 53c02-1308-FA-000779 God Bless you. Please contact me with your decision so I know you made a life changing decision for me , just please at least write me so I know you care enough about your citizens to respond to cries for your help. You can speak openly with my mother Charlotte Spain (828) 476-0406: 71 Lakeview Dr. Canton, NC 28716 Thank You Matthew Major I know yall get thousands of request and inmates claiming innocence, and each person who are innocent deserve to have organizations like yours willing to fight for them and I give yall so much Thanks and I thank God everyday yall are out there caring enough to help free the innocents. Since discovering firsthand how easily lives and families can be destroyed by Poor Defense attorneys not doing their job . And Prosecutors allowed to do as they please in court

  5. Frankly, it is tragic that you are even considering going to an expensive, unaccredited "law school." It is extremely difficult to get a job with a degree from a real school. If you are going to make the investment of time, money, and tears into law school, it should not be to a place that won't actually enable you to practice law when you graduate.

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