Often, the lawyer representing a plaintiff in a civil action will send a courtesy copy of the complaint to the insurer of the defendant named in the suit. Doing so can expedite settlement discussions or otherwise ensure that the entity most likely to provide compensation to the plaintiff has notice and an opportunity to evaluate the claim. But doing so can also trigger a chain of events implicating the legal ethics of insurance defense lawyers.
Sending a complaint to an insurer does not comply with Connecticut's service of process statutes, which require service directly on the insured defendant. But once an insurer has a copy of the complaint and notice of the lawsuit, obligations on the part of the insurer kick in. A typical liability insurance policy provides that the insurer shall have the right and the obligation to provide a defense to a claim that may give rise to coverage under the policy. Although coverage may be voided if the insurer is prejudiced by a failure of the insured defendant to cooperate in the defense, the availability of substituted service creates a situation in which an insurer knows about a potentially covered lawsuit significantly before the actual defendant learns of it. This is particularly true where service of process was defective and ineffective in providing actual notice to the insured defendant, but the insurer received a copy of the papers directly from the plaintiff's lawyer at or even before service was attempted.
The insurer, which owes a duty to defend a potentially covered claim, then fulfills that duty by hiring a lawyer to represent the insured defendant. As in any other representation, it is that lawyers's job to protect the interests of the lawyer's client. That obligation is no less where, as occasionally happens, particularly in situations of defective service, the client cannot be found. Although counsel ultimately may have to withdraw if counsel is unable to find and communicate with the defendant, as long as the lawyer is in the case, the lawyer owes obligations to the client.
Connecticut's Rules of Professional Responsibility recognize this dynamic in several ways. In addition to the commentary to Rule 1.4 providing that the exigency of a situation may require a lawyer to act without prior consultation with a client and the provision of Rule 1.5 recognizing that a third party may pay attorneys' fees, Rule 1.2 expressly recognizes that a client's decision to settle a matter is implied where, under the terms of a contract for a third party to provide defense and indemnification, the third party elects to settle a matter without contribution by the client. Insurance defense lawyers in Connecticut take seriously their obligations to represent their clients, the insured defendants, and to protect the interests of those clients, sometimes under difficult circumstances.
It is therefore disconcerting to find two justices of our Supreme Court, in Laiuppa v. Moritz, writing that, "It would violate our ethics rules for an attorney to appear in a case on behalf of a putative client without authorization," in support of their argument that the appearance of counsel hired by an insurer necessarily implies notice of a lawsuit to the client itself, through the client's agent, the defense lawyer. The client may indeed have authorized the appearance of an attorney on its behalf, through the client's agreement that the insurer shall have the right and duty to defend a potentially covered lawsuit, without the client having actual notice of the lawsuit. And, once counsel has appeared, a failure on the part of the lawyer to assert the interests of the absent client, including defective service on that client, can compromise the interests of the client.
Fortunately, two justices do not make a majority. But courts and lawyers should be cautioned against an unwarranted conclusion that a civil defense lawyer, simply by filing an appearance and acting, under exigent circumstances, to protect the interests of a client at the request of an insurer and without direct authorization from the client, may somehow be violating our rules of ethics. If that is not already clear from our rules, the rules should be amended to make it clear. And the filing of an Appearance by counsel should be recognized as a means of preserving, rather than prejudicing, the rights of a client.