When an insurance company selects and pays a lawyer to defend an insured policyholder, whom does the lawyer represent? Does the lawyer represent only the insured, or does the lawyer represent both the insured and the insurer? And what happens to the attorney-client privilege when the insured or the lawyer communicates otherwise privileged information to the insurance company in order to keep the insurer apprised of the status of the case?
In Camico Mutual Insurance v. Heffler, Radetich & Saitta, C.A. No. 11-4753 (E.D. Pa. Jan. 28, 2013), the U.S. District Court for the Eastern District of Pennsylvania recently concluded that, under Pennsylvania law, there is no absolute rule that treats the insured and the insurer as a single client of the lawyer appointed by the insurer to represent the insured. Instead, the facts of each case will control if the lawyer is engaged in a joint representation or only represents the insured. Under either scenario, all three entities insured, insurer and counsel should be cognizant of if and how the attorney-client privilege will apply to their communications.
