This article was originally presented January 31, 2008, by the author at a seminar entitled Current Issues Impacting Insurance Defense Practice, sponsored by National Business Institute.

Introduction

In the last few decades there have been great changes in the way that counsel appointed by insurance companies defend their insureds, both individuals and businesses, who have been sued for alleged tortious conduct. When I started back in 1978, almost thirty years ago, insurance defense practice was quite a bit different from the way it is now. Then it was considered a fairly stable low risk and comfortable way to make a living. The work was steady, and although there have always been potential conflicts between insureds and insurance companies, they were not on most defense counsels' radar screens.

The landmark case of Dumas v. State Farm Mut. Auto. Ins. Co., 111 N.H. 43, 274 A.2d 781 (1971), had been on the books for seven or eight years then, but it was seen as something that primarily affected insurance companies, as opposed to the defense counsel they retained. Tucked away in that decision, however, almost as an afterthought, is the germ of a concept that gives rise to most of the ethical issues that face insurance counsel today.

Who is the Client?

Many practitioners regard the Dumas decision as creating - or at least explaining - the duty that an insurance carrier has to avoid exposing it's insured's personal assets to an adverse judgment. In the event that the company negligently fails to settle a case within the policy limits, thus exposing it's insured to the personal consequences of a verdict in excess of those limits, it can be held responsible in a later lawsuit by its own insured for the entire amount of the verdict. Forgotten by some practitioners is the fact that the Dumas decision also addressed whether counsel for the erstwhile plaintiff in the underlying tort case - now the assignee of the erstwhile insured defendant - could gain access to the file prepared by the attorney assigned to defend the case by the insurance company. In deciding that such access would be allowed, the court rejected the company's argument that release of the file would "invade[] the privileged communications of the defendant and its counsel." It went on to state that this "argument fails to take into account that the attorney it engaged in that case represented both the defendant and the present plaintiff Dumas. '(W)here two parties are represented by the same attorneys for their mutual benefit, the communications between the parties are not privileged in later action between such parties or their representatives.'" Id., 111 N.H. at 49, 274 A.2d at 784. Thus, by that language, the New Hampshire Supreme Court effectively held that both the liability insurer and its insured are "clients" of the defense counsel appointed by the carrier to defend its insured. This is the prevailing view in most of the United States. See Douglas R. Richmond, Lost in the Eternal Triangle of Insurance Defense Ethics, 9 Geo. J. Legal Ethics 475, 482-483 (1996). For an excellent discussion of the state of the law on this question in New Hampshire, see N.H.B.A., Release of Billing Statement to Third Party Auditors, Ethics Committee Advisory Opinion No. 2000-01/05 (2000).

Despite the "two clients" rule stated in Dumas, however, in a 1993 decision the United States District Court for the District of New Hampshire stated in dicta that "[w]hen an attorney is retained by an insurance company to provide a defense under a liability policy, the attorney's client is the insured, not the insurer." Gibbs v. Lappies, 828 F.Supp. 6, 7 (D.N.H. 1993). In Gibbs, the appointed defense counsel, without the insured's consent, sought to withdraw three months before trial because the insurance company (apparently on the verge of insolvency) had not paid him for some time. While sympathizing with the attorney and his firm, the court found no basis to allow withdrawal over the objection of the firm's client. It is apparent from the judge's analysis that the case would have come down the same way even if the court had followed Dumas and found that defense counsel represented both insurer and insured.

The Tripartite Relationship

The relationship among a liability insurance carrier, it's insured, and appointed defense counsel has come to be known as the "tripartite relationship." Richmond, supra at 476. Although the majority of United States courts follow the "two client" rule articulated in Dumas, a growing number of courts in other states are holding that in the tripartite relationship, defense counsel only has one client, and that is the insured. "Proponents of this view believe that allowing an insurer to have an attorney-client relationship weakens the attorney's loyalty to the insured." Amber Czarnecki, Ethical Considerations Within the Tripartite Relationship of Insurance Law - Who Is the Real Client?, 74 Def. Couns. J. 172, 176 (2007). Espousing this view, the Supreme Court of Michigan found that a liability insurance company had no standing to bring a malpractice suit against the attorney it retained to defend its insured. Atlanta Int'l Ins. Co. v. Bell, 475 N.W. 2d 294, 296 (Mich. 1991).

There are a number of courts that, while adhering to the two client doctrine so long as there is no conflict, appear to depart from it in cases where a conflict arises. See Czarnecki, supra at 177-178. This theory appears to be based on the mistaken (in my view at least) premise that there is some difference in the client status between an insurer and an insured. Of course, the normal solution when a conflict develops between two clients represented by the same lawyer is for the lawyer to withdraw if the conflict cannot be ethically resolved. See N.H. R. Prof. Conduct 1.7, comment 29. See, also, Restatement (Third) of Law Governing Lawyers, §134, comment f. Proponents of the primary/secondary client approach, however, "indicate that '[w]hen a conflict arises . . . the lawyer owes 'undivided' allegiance to the insured, and cannot harm the insured to benefit the company.'" Stephen L. Pepper, Applying the Fundamentals of Lawyers' Ethics to Insurance Defense Practice, 4 Conn. Ins. L.J. 27, 68 (1997). The difficulty with this approach, in my view, is that the same statement could be made regarding the two client rule; it would simply be modified to indicate that the lawyer owes allegiance to both the insured and insurer, and cannot harm either one to benefit the other. Whenever I hear someone espousing the primary/secondary client rule, I am reminded of George Orwell's famous line from Animal Farm: "All animals are equal, but some animals are more equal than others."

Impact of Recent Changes to the New Hampshire Rules of Professional Conduct

As will be seen from the following discussion, the two client rule provides plenty of protection to the insured, without the necessity of providing an exception to the general rule that a client is a client is a client.

The inherent conflicts between insurance companies and their insureds, and the issues these conflicts create for defense counsel have not received a lot of attention from the courts in this state. Our Supreme Court has yet to consider many of these questions. In the vast majority of cases involving the tripartite relationship, everything goes smoothly. So smoothly, that, as defense counsel, many of us have come to accept the following as articles of faith.

Despite the apparently placid nature of defense work in the past, attorneys retained by insurance companies to defend their insureds should not become complacent. It is particularly appropriate at this juncture to examine some of the potential problems that can be created by the joint representation of insurance companies and insureds, because the New Hampshire Supreme Court has recently approved the overhaul of our Rules of Professional Conduct. These new rules were patterned primarily on the American Bar Association's Model Rules of Professional Conduct; however, there are some differences.

In the context of insurance defense work, it may be argued that the new rules do not really change anything; however, in some important respects they clarify and emphasize situations where conflicts can arise in the insurance defense context, and require all of us engaged in this kind of work to bone up on developments from other parts of the country in this field of law.

Many of the rules, whether changed on the first of this year or not, will have some importance to the tripartite relationship. The requirement of competent representation (Rule 1.1), the requirement of diligence (Rule 1.3), the need for adequate communication with one's client(s) (Rule 1.4), the requirement of confidentiality (Rule 1.6), and the requirement of independent judgment (Rule 5.4) all play a role in defining the lawyer's duties in the tripartite relationship. But the rules I believe will have the most effect on this relationship will be Rules 1.7 and 1.8(f).

The changes to Rule 1.7 arguably provide more guidance than in the past. Because of the importance of this rule, I will quote it in full:

N.H. R. Prof. Conduct 1.7. Conflicts of Interest

(a) Except as provided in paragraph (b), a lawyer shall not represent a client if the representation involves a concurrent conflict of interest. A concurrent conflict of interest exists if:

(1) the representation of one client will be directly adverse to another client; or

(2) there is a significant risk that the representation of one or more clients will be materially limited by the lawyer's responsibilities to another client, a former client or a third person or by a personal interest of the lawyer.

(b) Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a lawyer may represent a client if:

(1) the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client;

(2) the representation is not prohibited by law;

(3) the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal; and

(4) each affected client gives informed consent, confirmed in writing.

Rule 1.8(f) will also have an impact on the way defense counsel carry out their duties. This rule states:

N.H. R. Prof. Conduct 1.8. Conflict Of Interest: Current Clients: Specific Rules

* * *

(f) A lawyer shall not accept compensation for representing a client from one other than the client unless:

(1) the client gives informed consent;

(2) there is no interference with the lawyer's independence of professional judgment or with the client-lawyer relationship; and

(3) information relating to representation of a client is protected as required by Rule 1.6.

* * *

The wording of Rule 1.8(f) has not changed from what it was before the 1^st of this year (2008); however, the comments have been expanded significantly, and leave no doubt that it is directed primarily at defense counsel retained by insurers.

Common Conflict Scenarios in the Tripartite Relationship

There are a number of scenarios which can develop, which will bring these rules (and others) into play and which have been discussed at length in the literature and identified by courts around the country as particularly problematic in the insurance defense context. Before examining these, it is well to understand exactly what the courts regard as a conflict of interest. The prevailing view is that:

A conflict of interest is involved if there is a substantial risk that the lawyer's representation of the client would be materially and adversely affected by the lawyer's own interests or by the lawyer's duties to another current client, a former client, or a third person.

Restatement (Third) of Law Governing Lawyers, §121.

Defense Under a Reservation of Rights

The most common conflict scenario in the tripartite relationship arises when an insurance company defends under a reservation of rights. Typically, this occurs when a plaintiff brings a lawsuit alleging tortious conduct under a number of different counts, some of which are covered under the policy and some of which are not. For example, a lawsuit in which an insured defendant is charged with both intentional and negligent acts will typically trigger a reservation of rights letter from the carrier to its insured.

The company, pursuant to its policy and case law in New Hampshire, must provide a defense to its insured even if only one count arguably falls within the coverage of the policy. See, Broom v. Continental Casualty Co., 152 N.H. 749, 753, 887 A.2d, 1128, 1132 (2005). But the insurer does have the right to advise the insured that it will not provide indemnity should it later be found that the claims being made are not covered under the policy. This coverage issue can lead to conflicts, for the economic interests of the insurer would be served not only by a defendant's verdict, but also by a plaintiff's verdict on grounds for which there is no duty to indemnify.

In the insurance defense context, the primary concerns have been stated by some commentators as follows:

Most insurance defense attorneys have an on-going relationship with their insurers, and they work hard at developing future business. Conversely, few defense attorneys enjoy continuing relationships with the insureds they are hired to represent. It is this strong and perpetual economic linkage between insurers and their regular counsel that most concerns courts and insureds.

Richmond, supra at 482. In a defense under a reservation of rights, the concern is that the defense counsel may be tempted not to defend as hard on the non-covered claims as he or she does on the covered claims, thus, perhaps inadvertently, tilting the playing field towards one client (the insurer) to the detriment of the other client (the insured). Because of this potential for conflict, it is important that defense counsel at an early stage, do as much as possible to explain this potential to both clients so that they can give "informed consent, confirmed in writing." N.H. R. Prof. Conduct 1.7(b)(4). In the newly revised rules, these terms are now defined, whereas under prior rules of professional conduct, they were not.

Representation of Multiple Defendants

Another common situation, which has the potential to lead to conflicts of interest is the representation of multiple insureds. In the typical situation where a driver employed by the named insured is involved in an accident. the potential for conflict between the employer and employee is normally slight, particularly if there are adequate limits of liability. But consider a situation where the employee, rather than driving the employer's vehicle, was instead driving his own. Consider further that it is not entirely clear whether the driver was acting within the scope of his employment when he had the accident. Under the latter scenario, there is a conflict which would probably require the lawyer retained to represent both to decline representation of one of them. Even in cases where a potential conflict is less likely, the lawyer still would have a duty to fully explain matters to all clients and confirm their informed assent to the representation in writing.

Inadequate Limits of Liability (Dumas Situation)

Another area of potential conflict exists when the limits of liability of the insurance policy may not be adequate to fully compensate an injured plaintiff. This is the so-called "Dumas situation" with which most defense counsel are fully familiar. Although there is a potential for conflict in such cases, in my view, the potential is usually slight. On the surface it might appear that the insurance company's interest would be served by fighting a case of questionable liability "all the way," because its exposure is not great. However, in reality, the Dumas decision imposes an obligation upon the insurer to protect the insured's assets.

"The risk of the insurer varies with the coverage available above the settlement opportunity and the weight the insurer must give to the insured's risk increases as the insurer's surplus coverage decreases. When the surplus coverage is substantial, less weight is required to be given to the insured's interest. Where the settlement opportunity approaches the limit of coverage, then the insurer's duty may be heavily weighted toward the interest of the insured."

111 N.H. at 48, 274 A.2d at 784. To put it bluntly, because of this rule, insurance companies know that their company's exposure extends well beyond the stated policy limits. Nonetheless, despite the shared interest of the insurer and its insured in settling a case within the policy limits when the limits of liability are low, this issue must be discussed with the insured and insurer before informed consent to the representation may be given.

Defendant is Aligned with the Plaintiff

An especially problematic situation is presented when the insured defendant is sympathetic to the plaintiff. Perhaps the plaintiff was a passenger of the insured driver when the latter got into an accident. Perhaps the injured passenger is the spouse of the driver; therefore, the more money the passenger receives in settlement, the happier the insured driver will be. There is, thus, obviously a divergence of interest between the insured and the insurer in such a case. Not all such cases require counsel retained by the insurance company to decline the representation of the insured. After all, the company has to pay for a defense from somebody. But the insured must be apprised of this conflict and advised that it will be the duty of defense counsel to defend the case regardless of the insured's personal leanings - and the insured must give his or her informed consent to representation by the appointed counsel. Such cases become especially problematic, however, when the insured defendant is prepared to shade his or her testimony so that it will be favorable to the plaintiff. This, in my view, creates an insurmountable conflict, as defense counsel would be too likely to learn information from one client (the insured) which would be detrimental to that client if disclosed to the other (the insurer).

In one noteworthy auto accident case from New Jersey, defense counsel retained by an insurance company to defend its insured driver in a lawsuit brought by his wife, sought to impeach his insured client's credibility when the latter was testifying. Although the jury brought in a defendant's verdict, the appellate court reversed, and ordered a new trial, saying:

[I]t is clear that insurance counsel is required to represent the insured's interest as if the insured hired counsel directly. Indeed, insurance counsel's loyalty to the insured may actually be paramount. Permitting insurance counsel to impeach the credibility of an insured places counsel in a position of representing conflicting interests, and actually permits counsel to elevate the insurer's interest over the insured's. Such practice cannot be condoned.

Montanez v. Irizarry-Rodriguez, 273 N.J.Super. 276, 286, 641 A.2d 1079, 1084 (1994) (citations omitted).

And what if the insured defendant and the plaintiff are in active collusion to defraud the carrier? Consider a situation where the plaintiff who slipped and fell on an icy sidewalk is a friend and neighbor of the defendant. The pleadings indicate that the fall took place on the defendant's property. The defendant confirms that fact, claiming to have witnessed the whole thing. At some point after the dual representation commences, however, counsel learns from the insured defendant that the fall actually occurred on a city sidewalk, for which the defendant is not responsible. Under the circumstances, an insurmountable conflict will have been created that will require defense counsel to withdraw from representing the defendant immediately. Counsel, however, cannot give the reason for this withdrawal to the other client (the insurer) without harming the insured client and, therefore, must keep silent. See N.H. R. Prof. Conduct 1.6.

Different Views on Settlement

Another situation that creates the potential for conflict typically arises in professional liability cases. The company wants to settle to save legal fees; however, the insured defendant feels strongly that the case is defensible and should not be settled. The contract may give the right to settle to the insurance company, but the defendant lets you as defense counsel know in no uncertain terms that he or she does not want the case settled. What do you do? Some would argue that the contract is clear and, therefore, the company has a right to settle over the objection of its insured. But the contract is between the insurer and the insured; defense counsel is not a party to that contract. In any event, the insurance contract does not trump the obligations of a lawyer under the Code of Professional Conduct.

What do you do? In my view, you cannot go against the express wishes of one of your clients. Therefore, you cannot participate in settlement discussions yourself; however, there is nothing to prevent the claims representative from doing so. This scenario was presented in an Illinois medical malpractice case several years ago. The insured doctor (Rogers) told defense counsel that he did not want to settle. The insurer, however, wanted to resolve the case, and its appointed counsel negotiated a settlement with the plaintiff, on what appears to have been a "nuisance" basis. The court upheld the doctor's right to sue because:

Although defendants were employed by the insurer, [Rogers], as well as the insurer, was their client [citations omitted] and was entitled to a full disclosure of the intent to settle the litigation without his consent and contrary to his express instructions. Defendants' duty to make such disclosure stemmed from their attorney-client relationship with [Rogers] and was not affected by the extent of the insurer's authority to settle without [Roger's] consent.

Rogers v. Robson, Masters, Ryan, Brumund, and Belom, 81 Ill.2d 201, 205, 407 N.E.2d 47, 49 (1980).

This scenario does not arise very often these days, because most current professional liability policies now require the insured to give permission before the company can settle a case. Ironically, such "permission" clauses also relieve defense counsel as a practical matter from the conflict of interest just discussed. This is so because such policies normally contain what is known as the "hammer clause." Under such a provision, if the insurance company has a chance to enter into a settlement, and the insured refuses to give permission, the insured will be responsible for all defense costs, including attorney's fees, from that point on and also will be responsible for any adverse judgment in excess of the amount for which the case could have been settled. Because of this provision, the insured will typically grant such permission, thus allowing the attorney to participate in settlement negotiations on behalf of both.

Outside Counsel Guidelines

One of the current hot button topics for defense counsel is the use of so-called "outside counsel guidelines," by which insurance companies attempt to limit litigation expenses by requiring defense counsel to obtain permission of the carrier before conducting many of the activities involved in defending a tort case. As one author puts it:

In the insurance arena, litigation guidelines cover a wide array of tasks that an attorney may perform in providing a defense. "Litigation management guidelines typically include a statement of the insurer's goals (quality legal services at the lowest possible cost); a delineation of the respective duties of the claims professionals and the attorney; standard procedures for handling lawsuits, including required periodic consultations with or submissions to the claims manager to permit insurer direction of the case; an enumeration of tasks which require the insurer's prior approval...; and staffing guidelines and limitations." Among those tasks requiring the insurer's pre-approval are: (1) hiring an expert; (2) hiring an investigator; (3) taking depositions; (4) videotaping depositions; (5) filing motions; (6) undertaking discovery; (7) expenditures for travel; (8) computerized legal research; and (9) determining how many attorneys may attend depositions, hearings, and trials.

Czarnecki, supra, at 182.

On the flip side, the author goes on to say:

One frequently overlooked aspect of these litigation guidelines, however, is the role that they play in helping insurers make certain that defense counsel is doing what they were hired to do, which is provide a solid defense for the insured. In many cases, litigation guidelines "establish deadlines by which depositions are taken, fact investigation and 'paper discovery' is initiated, and decisions are made about the filing of dispositive motions." Hence, they can provide some benefit to the insured.

Id.

Despite the benefits that such guidelines bring to insurance companies, they do present a potential for conflict, which should be discussed in advance with both clients. See N.H. R. Prof. Conduct 1.8(f) and 5.4. Even if informed consent is given at the outset of a case, situations may arise down the road where the defense attorney believes that adherence to the guidelines will compromise the defense of the insured, and will require a choice to be made. Since that choice cannot favor one client over another, the choice, unfortunately, may be limited to withdrawal from representation of either. Like most potential conflicts, however, many of these can be smoothed over if adequate communication with both the insured and the insurer is maintained throughout the representation. With adequate communication, the purported conflict may, in the end, prove to be chimerical; the last thing an insurance company wants is to be sued for breach of contract because it failed to provide an adequate defense or, worse, to be sued by the former plaintiff as assignee of its insured in order to collect a judgment in excess of the policy limits.

Need for Independent Counsel

One recurring issue of particular interest in insurance defense work is "whether an insurer is required to pay for independent counsel for an insured when the insurer provides its own counsel but reserves its right to assert non-coverage at a later date." San Diego Navy Federal Credit Union v. Cumis Ins. Soc., Inc., 162 Cal. App.3d 358, 361, 208 Cal. Rptr. 494, 496 (1984).

Cumis arose out of a claim for wrongful discharge brought against the Credit Union by a former employee. The underlying suit sought $750,000.00 in general damages and $6,500,000.00 in punitive damages. The Credit Union tendered defense of the case to Cumis, which retained defense counsel, but also advised the Credit Union that it was reserving its rights to deny coverage at a later date because its policies did not cover punitive damages or breach of contract. Because of the reservation of rights, the Credit Union retained its own law firm to represent its interests and to act as co-counsel in defense of the wrongful discharge suit, along with counsel retained by Cumis. Initially, Cumis agreed to pay fees and costs generated by the independent co-counsel; however, after the first two invoices, Cumis sought an opinion from its retained counsel as to whether "there was a conflict of interest in representing the insureds, such that Cumis would be required to pay the expenses of separate counsel." Id., 162 Cal. App. 3rd at 363, 208 Cal. Rptr. at 497. In the coverage action brought by the Credit Union the trial court ruled that Cumis was required to pay for the independent counsel. After an exhaustive discussion on the canons of ethics in effect at the time, the California Court of Appeals in a landmark decision, held:

We conclude the Canons of Ethics impose upon lawyers hired by the insurer an obligation to explain to the insured and the insurer the full implications of joint representation in situations where the insurer has reserved its rights to deny coverage. If the insured does not give an informed consent to continued representation, counsel must cease to represent both. Moreover, in the absence of such consent, where there are divergent interests of the insured and the insurer brought about by the insurer's reservation of rights based on possible noncoverage under the insurance policy, the insurer must pay the reasonable cost for hiring independent counsel by the insured. The insurer may not compel the insured to surrender control of the litigation.

Id., 162 Cal. App. 3rd at 375, 208 Cal. Rptr. at 506.

Five years after Cumis sent shockwaves around the country, the California Court of Appeals for the 3rd District scaled back some of the earlier flat assertions made in Cumis. In the case of Foremost Ins. Co. v. Wilks, 206 Cal. App. 3rd 251, 253 Cal. Rptr. 596 (1989), the court considered whether a suit for defamation against Foremost's insured, in which both compensatory and punitive damages were claimed, gave rise to a conflict of interest requiring Foremost to pay for independent defense counsel on behalf of its insured, Wilks.

In affirming summary judgment in favor of Foremost, the appellate court rejected the idea that all reservations of rights create a conflict of interest, stating:

Under the policy issued to Wilks, Foremost is obligated to indemnify for damages up to $1,000,000 sustained in a personal injury action, which is defined by the policy to include defamation actions. Foremost is prohibited from indemnifying Wilks from any punitive damages pursuant to [California law]. However, Foremost will be liable for indemnification of compensatory damages if the trier of fact in the [underlying] action finds Wilks defamed [the plaintiff in the underlying action] regardless of whether her conduct was done with malice or reckless disregard for the truth. Contrary to Wilks' assertions, it is in Foremost's interest to vigorously defend the suit to avoid liability for indemnification of compensatory damages. Although the nature of Wilks' conduct as developed at trial will determine whether punitive damages are awarded, under the facts of this case and the coverage afforded Wilks under the policy, Foremost gains no benefit from pursuing a theory that Wilks acted with malice or reckless disregard for the truth. Ergo, there is no conflict of interest.

Id., 206 Cal. App. 3rd at 261, 253 Cal. Rptr. at 602. 

The New Hampshire Supreme Court has not yet grappled with the question presented in Cumis and Wilks; that is, whether there is a duty to provide independent counsel of the insured's own choosing in the event of a conflict of interest which is not waived by the insured. There is little doubt, however, that under the right circumstances our courts could find support in the Rules of Professional Conduct to impose such an obligation. Therefore, counsel retained by an insurance company to defend its insured under a reservation of rights must carefully explain the ramifications to the insured client at an early date and ascertain whether the insured wishes to waive the conflict.

Conclusion

In conclusion, most insurmountable conflicts of interest arise when communication has broken down. Normally, if both the insured and the insurer are kept informed of all developments in the conduct of the litigation, most conflicts can be avoided. One way to do this is to begin the communication with the insured client right at the beginning, on the same day the file is received from the company. I do this by sending a detailed letter which hits the high points of the litigation process and discusses in general what lies ahead. I also invite the insured in for a conference at an early date so I can discuss the case and the plan in more detail. I can also raise any issues where there may be a potential conflict in order to comply with the dictates of Rule 1.7. The form I use for such a letter is included. In that letter, I also refer to an article entitled "After the Deputy Leaves," that I wrote last year, which is intended to give a bird's eye view of the litigation process from the standpoint of an insured defendant. It is pitched toward owners of small businesses, but it also has useful information for any insured defendant.

As a practical matter, communication with the insured client will enhance not only the tripartite relationship, but usually will also tend to improve the chance of prevailing at trial. Insureds who take no interest in the litigation because "that's why I buy insurance coverage," do not tend to be well prepared when it comes time for trial. They are often clumsy and make mistakes when testifying, if they have not been read into the case and kept informed from the beginning. On the other hand, insured defendants regardless of whether they have personal exposure in a case, tend to be enthusiastic members of the "defense team" if they are treated as full members of the team from the very beginning.