Litigation Guidelines Shouldn’t Undercut Policy Holder

When corporations buy insurance to get coverage for settlements, judgments and the cost of defense, they expect robust representation, but they don’t always get it. Sometimes the carrier’s strategy is driven by its own financial considerations in a way that compromises the interest of the company, writes attorney Catherine J. Serafin. This may take the form of an insistence that counsel representing the company adhere to the insurer’s “litigation management guidelines” as a condition of payment of legal bills. The purpose of such guidelines may be laudable – to make litigation well-planned and cost-effective – but Serafin writes that some guidelines have the potential to impair a lawyer’s independent professional judgment, “thus implicating violations of ethical rules.” She discusses some of the more questionable guidelines that sometimes are broached, and provides some suggestions about how a policyholder can address the issue early, long before a claim is made or contemplated.