A Video Explaining the Relationship Between the Insurer and Defense Counsel

Lawyers & Adjusters Must Work Together

Defense Counsel

Whenever an insured is sued and requires a defense or the insurer is sued, the insurance adjuster and the defense attorney must understand their respective roles in preparing the case for trial. They must develop a rapport with each other and with the insured person or entity that is being defended, to make communication easier to maintain. Bad faith lawsuits and poorly tried bodily injury cases seem to arise when the adjuster and the defense attorney fail to communicate regularly with each other and the policy holder.

At the first meeting, the attorney and the adjuster should agree on the division of labor with regard to the preparation of the case, according to their respective training and experience. Counsel and the claims person should reach an agreement regarding the handling of the case.

Challenges to Use of in House Counsel

Defense counsel are sometimes employees of the insurance company. Some attorneys have challenged the use of in-house counsel on the ground that the insurer, as an employer of attorneys, is not licensed to practice law. They claimed that the insurer was engaged in the unauthorized practice of law—a crime. Attorneys in Texas convinced a trial court on the issue but the decision was reversed on appeal.

Attorneys have also raised challenges against house counsel because the employee attorney is alleged to be serving two different masters. As an employee of the insurer (it is alleged) the attorney cannot do justice to both his client, the insured, and his employer, the insurer.

© 2021 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost

equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Over the last 53 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.

Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/