Professional Liability Blog

The Washington Supreme Court held a law firm who had previously represented an insurance company in defending bad faith suits was not disqualified from representing plaintiff policyholders in a bad faith suit involving a fire loss against the same insurer. The Court held the representations were not “substantially related” because they were not factually related and the insurer did not show a “substantial risk” the law firm obtained “confidential factual information” which would “materially advance” the policyholders’ case. 

Following a post on the case of Sentry Select Ins. Co. v. Maybank Law Firm, LLC, – S.E2d –, 2018 WL 2423694 (S.C. 2018) regarding tripartite relationships, this article provides a brief overview of how Illinois, Missouri, and Kansas address the “tripartite” relationship between an insurer, its insured, and panel. Over the years, the tripartite relationship has taken on added significance with the prevalence of insured claims and the desire of insurers and insureds alike to safeguard their right to obtain the best possible legal services from their panel counsel.

Summary: This article provides a brief overview of the “tripartite” relationship between an insurer, its insured, and panel counsel and the theories under which a direct action can be brought by the insurer against panel counsel for legal malpractice. The “tripartite” relationship refers to the relationship among an insurer, its insured and defense counsel retained by the insurer to defend the insured. Panel counsel are familiar with the “tripartite” relationship and the ethical and professional concerns that it entails.