Thursday, June 16, 2005

Personal Injury and Insurance Defense

I used to work for Allstate, in-house, as an Insurance Defense lawyer. That means Allstate paid me a salary to work in their office, but my clients were Allstate customers.

I noticed a Georgia personal injury blog that discussed the ethical issues for insurance defense lawyers in a couple of recent posts:
One and another.

I saw these pressures in my work. A good example is when the insurance company places a low or zero value on a case when the insurance defense lawyer thinks the case value may exceed the insurance coverage. At least in theory, if the verdict comes in higher than the coverage, the company only has to pay the amount of coverage, and the customer (the lawyer's client) is left to pay the rest. In practice I've never seen a client pay out of pocket in such circumstances, but that doesn't change the lawyer's obligation to protect his client's interests.

The lawyer's obligation there is to make his concerns clear and make whatever record is necessary to protect his client. If the verdict comes in high, the client now may have a claim against the insurance company for "bad faith". The insurance company, which is paying the lawyer's bill (for outside counsel) or his salary (for in-house), does not like it very much when the lawyer advocates for the client against the company. I was nearly fired twice for doing this, and it was a major reason why I left and why I do not intend to do insurance defense work in my practice. Also, they pay crappy for outside counsel.

One thing a lot of plaintiff's lawyers don't realize is that an in-house lawyer faces less pressure than outside counsel. First, it's very easy for them to fire outside counsel. They don't fire you on that case, but they simply stop sending you new cases. Outside counsel have no protection from employment law. As in-house counsel, if you're fired for advocating for your client, you probably have a good lawsuit against the company (tortious interference with the attorney-client relationship, etc.), and the accompanying newspaper articles would be so damaging to the company ("Insurance company fires honest lawyer") that they would probably pay a good severance package to avoid such coverage. Also, a few years experience as in-house insurance defense makes one very marketable, especially to plaintiff law firms who appreciate knowledge of the inside workings of a major insurance company.
Post a Comment