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Retaining an Attorney by a Claims Person  

https://zalma.com/blog

 In instances where insurance claims may entail litigation, insurers must  move quickly to engage counsel. When an attorney is retained to defend a  person insured, the fact should be documented in writing by the  attorney, the adjuster, and the insured who is to be defended.  Before an insurer retains an attorney to represent an insured to defend  an insured who has been sued for a tort the claims person should be  certain the lawyer is competent to defend the insured. This can be  accomplished by attending a trial conducted by the lawyer where the  claims person can evaluate the lawyer\\u2019s competence at trial. If that  option is not available the claims person should seek recommendations  from other insurance claims professionals who have retained the lawyer  in the past or the insurance company\\u2019s list of approved defense lawyers  who have been evaluated by the insurer\\u2019s management.  If the attorney is being retained for the first time by the insurer, the  insurer should obtain an engagement letter from the attorney setting  forth the terms and conditions of the retention and signed by the  attorney, the claims person, and the insured. If the attorney or law  firm has an ongoing relationship with the insurer, only the person being  defended need sign an engagement letter.  

The claims person must understand that an engagement letter is an  effective contract between the lawyer and the insurer. As a matter of  law, there could not have been an implied contract between Plaintiffs  and Gulley, personally. Because the Court has decided the implied  contract issue as a matter of law based on undisputed facts, the issue  of whether there is a factual dispute regarding the existence of an  implied contract is moot. Like an insurance policy a lawyer\\u2019s engagement  letter will be read as written if there is no ambiguity.  

Whenever an insured is sued and requires a defense or the insurer is  sued, the insurance adjuster and the defense attorney must understand  their respective roles in preparing the case for trial. They must  develop a rapport with each other and with the insured person or entity  that is being defended, to make communication easier to maintain. Bad  faith lawsuits and poorly tried bodily injury cases seem to arise when  the adjuster and the defense attorney fail to communicate regularly with  each other and the policy holder.  At the first meeting, the attorney and the adjuster should agree on the  division of labor with regard to the preparation of the case, according  to their respective training and experience. Counsel and the claims  person should reach an agreement regarding the handling of the case.  

\\xa9 2021 \\u2013 Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders.  He also serves as an arbitrator or mediator for insurance related  disputes. He practiced law in California for more than 44 years as an  insurance coverage and claims handling lawyer and more than 54 years in  the insurance business.  He is available at http://www.zalma.com and zalma@zalma.com. Mr. Zalma  is the first recipient of the first annual Claims Magazine/ACE Legend  Award. Over the last 53 years Barry Zalma has dedicated his life to  insurance, insurance claims and the need to defeat insurance fraud. He  has created the following library of books and other materials to make  it possible for insurers and their claims staff to become insurance  claims professionals.