CBA Record

Y O U N G L A W Y E R S J O U R N A L

MAINTAINING PROFESSIONAL AND ETHICAL BALANCE IN THE TRIPARTITE RELATIONSHIP Stuck in the MiddleWith You By Phillip Skaggs

I nsurance defense attorneys can often feel stuck between the competing inter- ests of the insurer who retained them and the insured they have been tasked to defend. Illinois follows the majority approach to tripartite relationships, which holds that defense counsel retained by an insurer to represent an insured actually serves two clients simultaneously. Often, the three parties to this relationship share

a common interest in successfully defend- ing a claim. However, where the insurer reserves its rights to dispute some aspect of insurance coverage under the policy, or the insured and insurer have differing views on how the case should proceed, a conflict of interest might arise, leaving defense counsel stuck in the middle between two clients. While defense counsel’s loyalty may “follow the purse strings” and tend to lean

in favor of the insurer (even if unintention- ally), defense counsel owes the insured the same ethical and professional obligations as he or she would any other client. This “dual client” relationship requires main- taining a professional and ethical balance between the possibly competing interests of the insurer and the insured. This article addresses three major areas where the oth- erwise congruent interests of insurer and

44 APRIL/MAY 2016