Source: http://dutytodefend.com/compendium-of-attorney-duties-mol/
Timestamp: 2019-04-23 22:24:07+00:00

Document:
The ethical duties of California lawyers to their clients are well established. The duties of dependent counsel are complicated by a relationship with the liability insurers that regularly hire them. Liability insurance companies and their lawyers are regulated by California law. Each must be licenced and is obligated to fulfill a series of duties imposed by law for the benefit of the insurer’s policyholder and its lawyer’s client. Because insurers are not licensed to practice law, they must hire a lawyer to actually conduct the defense that the insurer promises to provide. Thus, a violation of duty by dependent counsel or an insurer may invite liability, but also synergistically impose liability upon the other. This Memorandum of Law collects California law describing four primary attorney duties with special emphasis on dependent counsel duties owed to an insurer’s policyholder because of potential conflicts of interest.
The four primary duties described here include the duty: 1) of competent representation; 2) of confidentiality; 3) of disclosure; and 4) of undivided loyalty. The ancillary duties are the duty to: 5) respond to inquiry; 6) advise of potential conflicts; 7) advise regarding settlement; 8) advise policyholder of the right to independent counsel; 9) initiate analysis of potential conflicts of interest; 10) decline conflicted representation; and 11) not undermine coverage. Many of these duties are more thoroughly described by other memoranda available on this site.
The practice of law is a regulated by statutes, case law, and rules of ethics. One must be licensed to practice law. “Protection of the public shall be the highest priority for the State Bar.” “The [Rules of Professional Conduct] are intended to regulate professional conduct of [lawyers] to protect the public and to promote respect and confidence in the legal profession [and are] binding upon all [lawyers who] are also bound by applicable law and opinions of California courts.” Thirty years ago “the professional obligations of counsel who represents a liability insurer as well as its insured — need[ed] clarification.” Case law is well developed defining the scope of dependent counsel’s duties to the policyholder when conflicts of interest arise.
“A [lawyer] shall not [a]ccept representation of more than one client in a matter in which the interests of the clients potentially conflict.” “We conclude the Canons of Ethics impose upon lawyers hired by the insurer an obligation to explain to the insured and the insurer the full implications of joint representation in situations where the insurer has reserved its rights to deny coverage.” “[Dependent counsel] also owed a duty to [policyholder/clients], under Civil Code, section 2860, to disclose potential conflicts of interest between [the insurer] and [the policyholders].” However, an aberrant line of cases applies an “actual and significant” standard.
 Bus. & Prof. Code § 6001.1.
 Rules of Professional Conduct, Rule 1-100 (ellipses omitted).
 Styles v. Mumbert (2008) 164 Cal.App.4th 1163, 1168.
 Rockwell Internat. Corp. v. Superior Court (1994) 26 Cal.App.4th 1255, 1263.
 Betts v. Allstate Ins. Co. (1984) 154 Cal.App.3d 688, 716 (Betts) (citations, ellipses, and quotation marks omitted).
 Rule 3-310(C) (emphasis added, ellipses omitted).
 San Diego Navy Fed. Credit Union v. Cumis Ins. Society, Inc. (1984) 162 Cal.App.3d 358, 375 (Cumis).
 Dynamic Concepts: Right on the Facts; Wrong on the Law!
 State Farm Fire & Casualty Co. v. Superior Court (1989) 216 Cal.App.3d 1222, 1235-1236 (ellipsis omitted); Manzanita Park v. Insurance Co. of North America (9th Cir. 1988) 857 F.2d 549, 555.
 Betts, supra, 154 Cal.App.3d at 710 (ellipses omitted).
 Gulf Ins. Co. v. Berger, Kahn, Shafton, Moss, Figler, Simon & Gladstone (2000) 79 Cal.App.4th 114, 131, quoting Dynamic Concepts, Inc. v. Truck Ins. Exchange (1998) 61 Cal.App.4th 999, 1007-1008 (Dynamic Concepts).
 Nichols v. Keller (1993) 15 Cal.App.4th 1672, 1684-1685.
 Cumis, supra, 162 Cal.App.3d at 374-75 (ellipses omitted).
 Dynamic Concepts, supra, 61 Cal.App.4th at 1008, fn.8 (ellipsis omitted).
 Price v. Giles (1987) 196 Cal.App.3d 1469, 1473 (ellipses omitted).
 Midiman v. Farmers Ins. Exchange (1999) 76 Cal.App.4th 102, 122 quoting Dynamic Concepts, supra, 61 Cal.App.4th at 1008.
 Shafer v. Berger, Kahn, Shafton, Moss, Figler, Simon & Gladstone (2003) 107 Cal.App.4th 54, 80-81 (citations, quotation marks, and ellipses omitted).

References: § 6001
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