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Is it common for an insurance company to replace the Defendants' Counsel in the middle of an ongoing personal injury case?

Chicago, IL |

In general, if an attorney representing a Defendant (or a group of Defendants) in a personal injury case is doing a poor job or not simply not getting the results the insurance company was hoping for, is it common or uncommon for the insurance company to replace Defendants' attorney with a different attorney?

Attorney Answers 8

Posted

Think of lawyers for insurance companies as employees of insurance companies, because they are!

There can be political issues, it can be a matter of caseload, or it can be a match up of the value of the case with the skills of that particular lawyer. Some "insurance defense" attorneys develop reputations of "always coming in below the offer" or getting juries to "never exceed the policy limits." Some work best with males, others with females, sometimes with certain judges, and sometimes they move firms and someone else must fill in. It's all part of it.

Now, the most important player if you are the plaintiff is your own lawyer so focus on that.

I don't know anything about your case, who the insurance company is, or anything else, but I can tell you this happens in some situations.

Good luck in your case!

Stephen L. Hoffman
Law Office of Stephen L. Hoffman LLC
Chicago, IL
773-944-9737
Email: stephen@hofflawyer.com
Website: www.hofflawyer.com
Blog: www.hofflawyer.com/blog/

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Posted

How about in an instance where a Defense attorney is initially appointed by the Defendant after being served with a lawsuit, and then both the Defendant and Defendant's appointed attorney subsequently fail to immediately report the claim to the Defendant's insurance company? When the insurance company finally gets wind of the claim, is it possible that the insurance company may want to replace the Defendants' Attorney with new Defense Counsel of their own choosing (assuming that the Defendant didn't already waive their right to insurance coverage for failure to report the claim in a timely manner)? Would this be a considered a common situation in your experience?

Stephen Laurence Hoffman

Stephen Laurence Hoffman

Posted

It's almost never an issue with a defense lawyer reporting an incident. First off, the insurance company knew about it or they wouldn't have assigned counsel. Perhaps there is an issue with the insured not reporting it initially, but not the attorney. I'm not sure that ever happens.

Posted

It's not uncommon. The reason usually has more to do with politics moving the account to another law firm, than it does with the attorney doing a poor job. Sometimes, if a client is unhappy with a lawyer assigned by an insurance company, the company will assign another lawyer.

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Posted

It happens more often for reasons having nothing to do with the attorney's handling of the case. www.galivanlaw.net

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Posted

Liability insurers generally retain the right to control the defense. It is not usually cost effective to change lawyers midstream. There could have been a conflict. You can ask the old and new lawyers to explain why this happened. You can also retain personal counsel to monitor insurance defense counsel and coverage concerns but you'll likely need to pay that lawyer yourself.

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John Gus Zgourides

John Gus Zgourides

Posted

My answer assumed you were the defendant. If you are the plaintiff, then ask your lawyer about the significance of the defense change.

John Gus Zgourides

John Gus Zgourides

Posted

My answer assumed you were the defendant. If you are the plaintiff, then ask your lawyer about the significance of the defense change.

Asker

Posted

How about in an instance where a Defense attorney is initially appointed by the Defendant after being served with a lawsuit, and then both the Defendant and Defendant's appointed attorney subsequently fail to immediately report the claim to the Defendant's insurance company? When the insurance company finally gets wind of the claim, is it possible that the insurance company may want to replace the Defendants' Attorney with new Defense Counsel of their own choosing (assuming that the Defendant didn't already waive their right to insurance coverage for failure to report the claim in a timely manner)? Would this be a considered a common situation in your experience?

Posted

It happens for a variety of reasons--some of which may be regarding the performance of the attorney and some of which may have nothing to do with it. Generally, a client can discharge an attorney at any time for any reason(s).

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Posted

it happens all the time and should be of no concern to you, the client. whatever choices they make regarding legal counsel may have to do with policy decisions, counsel fees, some dispute or something else which has absolutely nothing to do with your case.

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Posted

Having worked for insurance companies for 25 years as "panel counsel" or "outside counsel," I can tell you that replacement of outside attorneys (those not directly employed by the insurer as ”staff counsel") mid-case is a very rare occurrence. The five main reasons, in my experience, are:

1. The assigned attorney is either performing poorly on the case or, more likely, is habitually late in reporting to the insurer. In this case, the insurer will likely reassign the case to another attorney in the same firm.

2. The value of the case has substantially increased, usually due to a change in the nature of the injury, and the insurer wants to assign a more experienced attorney to the case from either the same or a different firm.

3. The attorney/law firm handling the case subsequently develops a conflict of interest in representing the insured. In this case, the insurer faces sanctions and/damages if it does not promptly replace the attorney from another law firm.

4. Attorneys and their insurer/clients often “tender" their insured's defense to another insurer since the other insurer also owes coverage to the mutual insured. If the other insurer accepts the tender of defense and agrees to provide coverage thereby taking over the case, they will usually always want their own attorney to handle the remainder of the case, and a change in law firms will occur.

5. The last reason is somewhat similar to the first except the law firm, not necessarily a single attorney, falls out of favor with the insurance company and the insurer decides not to use the firm any longer.

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Asker

Posted

How about in an instance where a Defense attorney is initially appointed by the Defendant after being served with a lawsuit, and then both the Defendant and Defendant's appointed attorney subsequently fail to immediately report the claim to the Defendant's insurance company? When the insurance company finally gets wind of the claim, is it possible that the insurance company may want to replace the Defendants' Attorney with new Defense Counsel of their own choosing (assuming that the Defendant didn't already waive their right to insurance coverage for failure to report the claim in a timely manner)? Would this be a considered a common situation in your experience?

David J. Kiesler

David J. Kiesler

Posted

I don't think it would occur that often. In your scenario, you have the defendant who was sued appointing counsel. By this, I assume you mean that the defendant simply hired his own lawyer once served with suit papers. However, a defendant having liability insurance, be it auto, homeowners, or business coverage, would typically tender his defense (request insurance coverage) to his own insurer instead of going out and hiring a lawyer with personal funds. People don't ordinarily pay for something they can get for free. The scenario you raise usually occurs when a defendant is sued and he mistakenly believes the lawsuit is not covered by his insurance policy, so he goes out and hires his own attorney. When the lawyer reviews the case, he realizes there is insurance coverage and then tenders his client's defense to the insurer. Regarding the main thrust of your question, an insured, under the insurance policy, which constitutes a written contract, is required to give ”prompt notice" of BOTH the accident ( or other occurrence giving rise to the claim) AND notice of the lawsuit being served. If he does neither for a long period of time, typically more than 9-12 months, he likely will have violated the notice provision in the policy which voids (or waives) insurance coverage. In your example, you have defendant's attorney failing to initially report the “claim." I assume you meant the lawsuit. If the delay is just a few months, coverage won't be in jeopardy. Also, keep in mind that under Illinois law, there are five exceptions to giving prompt notice, but that's for another day. So, assuming late notice hasn't waived coverage, then the insurer will absolutely want to appoint its own attorneys to defend the insured/defendant. Note that the insurer has the contractual right to control its insured's defense. This gives it the right to select and appoint counsel of its own choosing. There are several pragmatic reasons an insurer wants its own attorneys defending the case. First, the insurer has had a long relationship with most of its attorneys and they have developed a good working relationship. Second , the insured's personal attorney may not practice or be proficient in personal injury law. Third, and perhaps most important, is that the insured's personal attorney likely charges significantly more per hour (often times double or triple) than the insurer's attorneys who often cut the insurer a deal on their rates in exchange for continuing business. Hope this helps. David J. Kiesler

David J. Kiesler

David J. Kiesler

Posted

I don't think it would occur that often. In your scenario, you have the defendant who was sued appointing counsel. By this, I assume you mean that the defendant simply hired his own lawyer once served with suit papers. However, a defendant having liability insurance, be it auto, homeowners, or business coverage, would typically tender his defense (request insurance coverage) to his own insurer instead of going out and hiring a lawyer with personal funds. People don't ordinarily pay for something they can get for free. The scenario you raise usually occurs when a defendant is sued and he mistakenly believes the lawsuit is not covered by his insurance policy, so he goes out and hires his own attorney. When the lawyer reviews the case, he realizes there is insurance coverage and then tenders his client's defense to the insurer. Regarding the main thrust of your question, an insured, under the insurance policy, which constitutes a written contract, is required to give ”prompt notice" of BOTH the accident ( or other occurrence giving rise to the claim) AND notice of the lawsuit being served. If he does neither for a long period of time, typically more than 9-12 months, he likely will have violated the notice provision in the policy which voids (or waives) insurance coverage. In your example, you have defendant's attorney failing to initially report the “claim." I assume you meant the lawsuit. If the delay is just a few months, coverage won't be in jeopardy. Also, keep in mind that under Illinois law, there are five exceptions to giving prompt notice, but that's for another day. So, assuming late notice hasn't waived coverage, then the insurer will absolutely want to appoint its own attorneys to defend the insured/defendant. Note that the insurer has the contractual right to control its insured's defense. This gives it the right to select and appoint counsel of its own choosing. There are several pragmatic reasons an insurer wants its own attorneys defending the case. First, the insurer has had a long relationship with most of its attorneys and they have developed a good working relationship. Second , the insured's personal attorney may not practice or be proficient in personal injury law. Third, and perhaps most important, is that the insured's personal attorney likely charges significantly more per hour (often times double or triple) than the insurer's attorneys who often cut the insurer a deal on their rates in exchange for continuing business. Hope this helps. David J. Kiesler

Asker

Posted

Thank you very much, this is very helpful information!

Asker

Posted

Just wanted to say again how helpful your above posts actually were. Simply put, per the recent events of my case, everything you said above regarding my question concerning replacement of counsel mid-case by an insurance company hit the nail right on the head.

Posted

Based upon my experience,it is not common.Occasionally,a conflict develops or the insurance carrier decides that it needs a more experienced attorney but Ifind this to be rare.

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