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Insurance Companies Use Of Captive Or In-House Counsel To Represent Insured Constitutes The Unauthorized Practice Of Law: Is American Home The Right Decision For Texas Comment., Daniel M. Martinez

St. Mary's Law Journal

Insurance companies should not be allowed to continue the practice of hiring in-house or captive counsel to defend against a claim covered by their insurance policy. Under a typical liability insurance policy, the insurer has a duty to defend. When legal counsel is retained, the insurer pays for the representation and has a contractual right to control the defense. This places defense counsel in a precarious situation because he or she has to balance the contractual obligations to the insurer against his or her ethical responsibilities to the insured. The defense counsel may be exposed to a malpractice claim by …