The Tripartite Relationship: Is It A Reality Or Just A Nightmare? ABA Section of Litigation Committee on Insurance Coverage Tucson, AZ – March 4, 2005 Steven Brower Stephan, Oringher, Richman & Theodora Orange County, California firstname.lastname@example.org Program Outline Introduction Explanation of the issue Speaker’s will introduce themselves Brief Panel Presentations Hypotheticals/Audience Discussion Tripartite Relationship The insured has a third-party liability policy which [potentially] covers a claim The insurer selects and pays counsel to represent the insured Is the client only the insured or is the insurer also a client? 2 Clients + 1 Counsel = Tripartite Relationship The issue is not just whether there can be privileged communications – the issue is full attorney/client relationship Panel Participants Laura Foggen Wiley, Rein & Fielding David Gauntlett Gauntlett & Associates (Irvine, CA) email@example.com Diane Karpman Karpman & Associates (Los Angeles, CA) Hypothetical Issue #1 Retainer Agreements Retainer Agreement Mandatory with the insurer? Mandatory with the insured? Single letter with full disclosure of “case handling rules”? Do you ask the insured to agree to pay in case of default of the carrier? Do you ask the insured to agree to pay in case of coverage being withdrawn? Hypothetical Issue #2 Communications with Client(s) Communication with the clients Can you ever have a communication which isn’t disclosed to both clients? Do you send bills to the insured? Defense within the limits Do you advise the insured that the carrier rejected a strategic decision? How do you advise the insured that the carrier rejected a settlement proposal? Carrier insolvency Hypothetical Issue #3 Coverage Advice to the Insured Can you exclude coverage advice from your representation of the insured? Do you advise the insured that there is a coverage issue? Do you advise the carrier that there is a coverage issue? Can you exclude the obligation to give coverage advice with a written agreement? Are those routinely undertaken? Hypothetical Issue #4 When an Actual Conflict Arises How do you proceed when an actual conflict arises between the clients? The insured tells you a “bad fact” Do you advise the insured about the problem before you advise the carrier? Can you continue to represent either of the clients? Does your retainer letter explicitly say what happens under these circumstances? Does it matter?