Should you hire a lawyer even if your insurance company has hired a lawyer for you?
People buy insurance liability policies (such as automobile insurance, homeowner insurance, professional liability, and business insurance) with the general expectation that if they are sued by somebody hurt in an accident the insurance company will hire a lawyer to protect them.
If an insurance company does hire a lawyer to protect you if you are sued after an accident, you generally do not have to pay the lawyer’s bills. Instead, the insurance company usually pays the lawyer’s fees and costs incurred in defending you. However, keep in mind that in this type of matter the lawyer has two clients: (1) you and (2) the insurance company. State Farm Mut. Auto. Ins. Co. v. Hansen, 131 Nev. 743, 745, 357 P.3d 338, 339 (2015).
In most instances, there is a unity of interest between you and the insurance company such that the lawyer may represent both clients without any conflict of interest. This is what is commonly called the “Tri-party” relationship.
However, there are instances when a conflict may arise between you and your insurance company that is defending you in a lawsuit. For example, the insurance company might send a reservation of rights letter to you pointing out that there are damages asserted against you in the lawsuit that are not covered by the insurance policy. If you need the advice of any attorney as to what is or is not covered by the insurance policy, the lawyer hired by the insurance company cannot provide you with such advice. Instead, you should hire your own separate independent lawyer, at your own expense, to provide you with legal advice as to what is or is not covered by the insurance policy. In such a scenario, the insurance lawyer can still defend you without having to express any opinion on what is covered by your insurance policy.
Similarly, if you disagree with your insurance company on any significant issue, such as for example the insurance company not offering (in your opinion) enough money to settle the case to protect you, it may be prudent for you to directly hire a lawyer who can demand things from your insurance company that the lawyer hired by the insurance company cannot demand.
In some instances, the lawyer hired by your insurance company to protect you might run into an ethical conflict that prevents the lawyer, or any lawyer hired by the insurance company, from representing both you and the insurance company. While this is unusual, a fact pattern can arise where a lawyer hired by your insurance company cannot represent you while maintaining his or her duty to the insurer. If this happens, you may, at the insurer’s expense, hire your own attorney to directly represent you. (“When a conflict of interest exists between an insurer and its insured, Nevada law requires the insurer to satisfy its contractual duty to provide representation by permitting the insured to select independent counsel and by paying the reasonable costs of such counsel.” Hansen at 749, 341-342.)
What constitutes an ethical conflict for an attorney in case may be difficult to determine. It is therefore sometimes a good idea to hire an independent attorney to analyze if the attorney hired by your insurer may have any ethical conflict. If you have such a question, you may call the attorneys at Lemons, Grundy and Eisenberg to see if we can help.