Lugar de Noticias Haynes and Boone

Hi--I'm Your Lawyer; We Haven't Met: When May an Insured Select Its Own Counsel?
1/11/2005
Ernest Martin, Jr.

A business entity has a strong interest in its relationship with its lawyers.  It relies upon counsel to advise the business on issues ranging from the payment of taxes to exposure to legal liability.  Therefore, any business requires counsel that is familiar with its products, its industry, and its personnel.  At the same time, however, the business must protect itself against risk exposure, and that protection is most often secured through the purchase of insurance.  When faced with the unforeseen, though, many policyholders are shocked to learn that they lack complete control over who represents them, as most insurance policies provide the insurance carrier with that right.  Accordingly, this article addresses the issues relating to the insured’s involvement in the selection of defense counsel.  First, the article examines the ethical underpinnings of the selection issue, namely, that defense counsel’s loyalty flows to the insured, rather than to the insurance carrier.  Second, this article surveys the existing law addressing the insured’s right to select counsel, both in Texas and in foreign jurisdictions.  Finally, this article offers insight into when the insured’s right to choose its lawyer is invoked.