‼️
Prof Responsibility • Loyalty
PR#025
Legal Definition
California has a statutory exception that states there is no conflict when a lawyer represents a policy holder and their insurance company as joint clients as long as the insurer's interest in the matter is only as an indemnity provider.
Plain English Explanation
In California, a lawyer can represent both an insurance company and its policyholder at the same time without it being considered a conflict of interest. This is allowed as long as the insurance company's only interest in the case is to provide indemnity, which means to cover the costs or damages. This special rule is written into California law.
Hypothetical
Hypo 1: Sam gets into a car accident and is sued by the other driver for $100,000. Sam's car insurance policy with SafeDrive Insurance has a limit of $300,000. SafeDrive hires Bob, a lawyer, to defend Sam in the lawsuit. Result: Under California's statutory exception, there is no conflict of interest for Bob to represent both Sam and SafeDrive Insurance as joint clients. SafeDrive's interest in the matter is solely as an indemnity provider - they're only involved to pay damages if Sam loses the case, up to the policy limit. Bob can ethically represent both Sam and SafeDrive without needing to obtain special consent or waivers.
Visual Aids
Related Concepts
Are lawyers allowed to have sex with their clients?
Can an attorney continue to represent a client if a conflict exists?
Does representing clients with inconsistent positions violate the lawyer's Duty of Loyalty?
How can a lawyer limit their malpractice liability with a client?
How can screening avoid imputed conflicts?
How do the California rules differ from the ABA when it comes to a lawyer accepting compensation from a party other than their client?
In assessing a conflict of interest, what is a concurrent conflict?
In assessing the Duty of Loyalty, what's the difference between an actual conflict and a potential conflict?
In California, are lawyer's allowed to have sex with their clients?
In California, how can a lawyer limit their malpractice liability with a client?
In California, how must a lawyer advise their client to seek independent counsel when dealing with potential financial conflicts?
In California, what are the restrictions related to lawyers acquiring the media rights of their clients?
In California, what are the restrictions related to lawyers receiving gifts from their clients?
In California, when may a lawyer loan money to a client?
What are some common issues that occur when a lawyer represents multiple clients in the same matter?
What are the most common types of conflicts of interest that involve a lawyer's own interest?
What are the restrictions related to lawyers acquiring the media rights of their clients?
What are the restrictions related to lawyers receiving gifts from their clients?
What is an imputed conflict and how can it be resolved?
What is required in order for a lawyer to accept compensation from a party other than their client?
What is required in order for a lawyer to avoid a financial conflict with a client?
What is the Duty of Loyalty?
When does the general rule of imputed conflicts NOT apply?
When may a lawyer appear as a witness in a matter where they represent a party?
When may a lawyer loan money to a client?
When may there be a conflict of interest with a former client?
