Texas Supreme Court: Use of Defense Staff Attorneys OK in Some Cases

March 31, 2008

  • March 31, 2008 at 9:55 am
    A Claims Representative says:
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    I wonder what would be said if the insurance company used staff attornies to represent their company and their employees i,e. claims representatives that are personally sued? Or even the same defense counsel to defend both parties. Seems like possibe conflicts of interest could easily arise from those actions.

  • March 31, 2008 at 2:37 am
    Joe K. Longley says:
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    This decision will spawn a new wave of insurance bad faith cases where damages ensue from the insured’s interests not being “congruent” with those of the insurer. Staff attorneys can only be used where the joint interests are “congruent”, AND NOT OTHERWISE. [Emphasis supplied].

    The Texas Insurance Code provides treble damages; court costs and attorneys’ fees to insured’s injured by companies engaging in unfair or deceptive insurance practices.

    The “high-fives” may be a little pre-mature.

  • April 13, 2008 at 1:54 am
    One who's worked with them says:
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    Our role is to provide a solid and proper defense. Commercial claims involve deductibles which automatically oppose the “best interests” clause. There goal then is to keep the payment below that amount, bill the file as much as possible as that too is included in the deductible. The insured is the only one that loses. In a subrogation setting, staff attorney should not be permitted as all the company and the staff attorney care about is what they get paid is what the company share was-and therefore the insured gets nothing. Those are not the best interests. If allowed, a joint prosecution agreement should be entered into eliminating the deductible amount setting up a proportionate division of funds and expense. See how gun ho they are then. Staff Attorneys rarely have the skill set, motivation or experience of a panel attorney who earns his money based on results. We’re cheating the insured. I am not an attorney giving a self serving statement. I was with an insurance company and see this as fraud. Signed-Anonymous and Disgusted that this has not been uncovered.

  • April 13, 2008 at 2:27 am
    Joe K. Longley says:
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    A good point.

    There is hardly an instance that can be imagined where representation of an insured by an insurer-employed staff attorney will be conflict free. The possibilities for “bad-result” breach of fiduciary duty cases against the staff attorney and his/her employer are limitless. This opinion will open up a new cottage industry of insurance bad faith cases diectly against insurers. These cases will not be removable to federal court because the non-diverse staff lawyer will be named as a party defendant.



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