Representing two clients at once, insurance defense attorneys walk a very fine line. Called the “tripartite relationship,” an insurance defense attorney is called upon to represent an insurance company’s insured for the mutual benefit of the insurer and the insured. As with most cases, when the goals of the two “clients” are aligned, the relationship works seamlessly and efficiently. The insured gets a defense and the insurance company gets to control said defense, including the right to settle or not to settle a claim.
A recent Pennsylvania Supreme Court case, Babcock & Wilcox v. American Nuclear Insurers, PICS No. 15-1161, added a new twist to the relationship. In Babcock, the court held that an insured could, under certain circumstances, enter into a settlement with a plaintiff, without its insurer’s consent, and require the insurer to reimburse it for the costs of the settlement.
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