Opinion ID: 853748
Heading Depth: 4
Heading Rank: 1

Heading: The Insurance Company as Co-Client

Text: As a related matter, there is extensive debate in the literature as to whom the attorney represents in this situation. [16] Specifically, whether the attorney is an employee or an outside lawyer, the debate focuses on whether only the insured or both the insured and the insurer should be viewed as the client. We think it unrealistic to ignore the client relationship with both. Joint representation may become problematic, particularly if issues of disclosure of confidences arise. For example the attorney may gain information from the policyholder-client that may affect the insurer-client's coverage obligation. But that is no basis for prohibiting the arrangement in all cases. Whatever issues joint representation raises appear to be wholly independent of the attorney's status as an employee of the insurer or a member of a law firm. Second, there is nothing inherently wrong in common representation of two parties where their interests are aligned. Professional Conduct Rule 1.7 provides direction [w]hen representation of multiple clients in a single matter is undertaken.... In this respect, the insured and insurer present no qualitatively different situation from any other pair of commonly represented clients. If a conflict arises, it will have to be handled, and there are a variety of means to do that. But a vast number of claims have been and presumably will be handled with no significant issue between the insurer and the policyholder. Interests of economy and simplicity dictate that this be permitted to continue. Any abuses can be handled on a case-by-case basis rather than by adoption of the broad prohibition the Wills seek. Although issues may arise in dual representation, none are apparent in this case. In any event, Celina has by contract subordinated its interests as a client to those of Suter. Presumably, this resolves by agreement the priority of counsel's obligations if, for example, counsel learns of information that affects the insurer's and the policyholder's interests differently.