Academic journal article Defense Counsel Journal

Practice of Law

Academic journal article Defense Counsel Journal

Practice of Law

Article excerpt

Tripartite Relationship, Outside Audits Nixed in Montana

Responding to an original proceeding for declaratory judgment and disdaining to follow the tripartite relationship theory, the Montana Supreme Court has proclaimed that under the Montana Rules of Professional Conduct the insured is the only client of defense counsel retained by an insurer to defend the insured. In the Matter of the Rules of Professional Conduct and Insurer Imposed Billing Rules and Procedures, 2000 WL 668915.

From this base, the court answered the two questions posed to it regarding ethical practice by Montana lawyers. They would violate the Montana rules, the court said, first, if they agreed to abide by an insurer's "billing and practice rules which impose conditions limiting or directing the scope and extent of representation" of the insured, and, second, if they followed an insurer's requirement "to submit detailed descriptions of professional services to outside persons or entities without first obtaining the informed consent" of the insured.

The decision were attenuated somewhat, however, in the court's opinion by Justice Leaphart. Although the insured is the sole client of the defense lawyer (the court emphasized sole), the court stated that its decision did not mean that defense counsel should have a "blank check" (the court's quotation marks) "to escalate litigation costs nor that defense counsel need not ever consult with insurers. …

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