The Right to Choose – Selecting Your Own Defense Counsel as a Company Right

Often, in-house counsel wish to use lawyers previously used by the company on similar claims, but cannot do so unless such independent, outside lawyer is on the carriers “approved” list.

The right to “select” counsel is different from the right to “suggest” or to “be consulted on” the selection of counsel because it allows the company to use an attorney of its choice.

Although carriers have strict criteria for attorneys on the “authorized approved list of attorneys,” the insured may have business reasons, other than purely objective criteria, for desiring to use an attorney not on the list. Bear in mind, sometimes the local attorneys who defend the insured are employed by “captive” law firms on the insurer’s payroll who will defend only the very narrow “insured” issue.

For example, a company may desire a broader defense for a workers compensation claim wherein the defense attorney considers employment, labor and injury management issues rather than just the narrow issue of whether the injury was work-related.

The insured should retain the right to request and select private investigators and have the right to specify the type of investigation needed.

There is a huge difference between an “activities check” and a “sub-rosa investigation.”

An activities check is limited to making inquiries and usually does not include in-depth, undercover, videotaped surveillance of the claimant’s abilities.

The company aggressively controlling workers compensation claims may want to right to select the investigator of its choice because it has had previous success with a local investigator or a certain firm it uses nationwide.

ASI specifies copies of all investigative reports be forwarded to the insured.

Another negotiating point — an insured company may request all settlements over, say, $10,000 be considered for structured settlement, and may reserve the right to select a structured settlement company of its choice and/or to obtain competing bids from financially sound structured settlement companies.

Some companies prefer to purchase structured settlements from firms affiliated with their company or with their broker, rather than with the insurer.

One insurer had an “authorized list” containing the name of only one structured settlement company, also owned by the insurer.

By contrast, another well-known insurer considers, as standard operating practice, every settlement over $5,000 for a structured settlement.

The insured saves money and the carrier earns a commission from the structured settlement placement creating a winning situation for both.

Managing claims and litigation is nearly impossible without complete and explicit account servicing instructions (ASI).

Also known as account instructions, claim service instructions or account handling instructions, ASI represent the agreement or understanding between the insured and the field adjusters at the insurer’s branch offices that guides the handling of all suits and claims, both litigated and non-litigated.

These instructions should be disseminated to all your branch offices across the country.

The ASI includes information about how claims are to be handled in every line of insurance including workers compensation, products liability and automobile insurance. (Third-party administrators who provide claims servicing without insurance also use ASI to guide their adjusters.)

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