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As I understand it, with regards to civil claims handled through insurance there are two duties involved:

  • An insurance company has a duty to defend their client, in the US this seems to be inherent in insurance law, in the UK it seems to depend on the insurance covering legal fees (but most do, assume that it is so here)
  • A lawyer has a duty to act in their client's best interests

If a lawyer is acting in such a case where the defendant is an individual, they are likely to be paid by the insurance company and representing the individual. In whose best interest are they required to act?

The specific case in question is the result of an car accident, where the insurance company has not made an offer than it is possible for the claimant to accept, has not even acknowledged any offers made by the claimant and I THINK has advised the defendant that they are not required to provide their address to the claimant, even though it is a legal requirement for them to do so. I think that if the claimant initiates legal action they shall be required to declare this lack of provision of address, which I suspect will be very much not in the interests of the defendant, possibly even involving criminal charges.

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    I am not sure that "An insurance company has a duty to defend their client". Guess the word you want to use here is "indemnify", not "defend". Basically, if anyone claims anything against an insured person, such claims can be re-routed to the insurance company. The person may still need a lawyer to perform this re-routing though if the claimant is stubborn and wants to sue the person instead of their insurance company.
    – Greendrake
    Jul 20, 2022 at 10:29
  • @Greendrake I think I may be confused between the US and UK. Duty to defend seems to be a thing in the US, but this says "As a general rule, under English law, an insurer is not under any duty to defend a claim made against an insured. The policy may, however, provide that the insurer will do so". I guess we can assume in this case the policy provides that the insurer will do so. I have edited the question to take this into account.
    – User65535
    Jul 20, 2022 at 10:40
  • I can understand why the question might have been asked. After a collision in which the other party was 100% to blame, the 'legal cover' additional to my insurance policy obtained a result that was most beneficial to the two insurance companies concerned, not to me. In other words, an expedient solution. But it was not part of the insurance policy itself.
    – Weather Vane
    Jul 20, 2022 at 11:14
  • @Greendrake insurance companies do have a duty to defend. If it turns out the policy doesn’t cover the event, they can recover the costs from the client but they have to defend.
    – Dale M ♦
    Jul 20, 2022 at 12:49
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    @WeatherVane not really an issue in Australia. About 40 years ago the motor vehicle insurance industry adopted a knock-for-knock policy - each insurer pays for damage to theirinsured’s vehicle and they don’t sue one another. Since, on average, their driver will be wrong half the time it all works out in the end and since no one has to pay any lawyers costs and premiums are much, much lower. Your insurer decides if you are wrong (which you can dispute) for premium and no claims adjustments. Mandatory no-fault injury insurance pays for the lifetime care of anyone who gets injured.
    – Dale M ♦
    Jul 20, 2022 at 21:10

2 Answers 2

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Generally the insurer appoints a solicitor from its panel and instructs the solicitor to defend the claim in the name of the insured on the basis of the insurance policy.

In the circumstances the solicitor has two clients, the insured and the insurer - a 'joint retainer'.

The solicitor must not behave as if there is a 'primary client' or preferred client. A conflict of interest may arise. The solicitor has a duty not to act in the matter if there is a conflict of interest or a significant risk of one. The solicitor should ensure the insurer is aware of its duty to have regard to its own interests and the insured's interests.

If the solicitor gets this wrong the insured may have a cause of action against the solicitor for breach of contract; the solicitor may face disciplinary proceedings for breaching the solicitor's Code of Conduct; a complaint could be addressed to the Legal Ombudsman (which may award compensation).

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There is no conflict

The insurer has a right of subrogation - a right to stand in the shoes of the insured. This is a common law principle but is almost always a contractural provision of the policy.

That means that once the insurer has agreed to indemnify the insured, the insurer has the absolute right to decide how to resolve the case. Since they are on the hook for the money, they get to call the shots. They can decide to settle or to fight and, if they fight, they can decide the strategy.

The lawyer works for the insurer and does not work for the insured. The insured’s only involvement is to provide information/testimony as and when requested. Normal practice is for the insured to forward any correspondence they receive to their insurer.

If the insured is concerned that the insurer is not complying with the policy, they need to hire their own lawyer to resolve that dispute.

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