Law firm ABC & Co was formed in 2007 as a partnership by Anna, Bryan and Calvin.  Two years later, Calvin fell out with Anna and Bryan thus deciding to dissolve their partnership, and he formed a sole proprietorship, Messrs Calvin & Co.
In 2009, Anna, Bryan and Calvin were named as Defendants in a civil suit served on them by a former client of ABC & Co.  Anna and Bryan notified the Insurers upon receipt of the claim and a panel lawyer, Ms Z, was appointed to defend them in the Suit.

When Ms Z approached Calvin to inform him of his coverage as an ex-partner of the firm and to discuss the claim, Calvin was reluctant to cooperate with her.   He insisted that he was the best candidate to defend himself as he is most familiar with the claim.   Calvin also assumed that he would have differing opinions and strategies from Ms Z, although such discussions never took place.  Calvin informed Insurers that he will defend himself and challenged his insurance Policy obligation to pay his Base Excess, stating that he would not incur any defence costs if he represented himself in court.
 
The Insurers advised Calvin that a joint defence with his ex-partners would benefit all of them collectively and that defending himself would amount to non-cooperation under the Policy which would result in repudiation of his indemnity.

Despite the advice, Calvin filed a Notice of Change of Solicitor to defend himself.  When he was cautioned by the Insurers on his conduct and again warned of the repercussions, he was still adamant on representing himself.

At this juncture, Ms Z continued to defend only Anna and Bryan in the Suit.  During a pre-trial case management, Ms Z negotiated with the Plaintiff and succeeded in having Anna and Bryan withdrawn from the Suit.  As Calvin was not part of the negotiations, the Plaintiff proceeded against him.  As the Suit progressed to trial, Insurers repudiated Calvin’s coverage on this claim for non-cooperation.

A surprising turn of events was during mid-trial, where Calvin wrote to Insurers to seek reinstatement of his insurance coverage.  Calvin felt that the trial was not proceeding in his favour.  However, upon considering Calvin’s appeal, the Insurers found that Calvin’s conduct of discharging the panel lawyer and defending himself has caused prejudice to both the Insurers’ and Calvin’s interests.  On Calvin’s dispute of the repudiation of his indemnity, the Insurers explained that his taking over conduct without the Insurers’ consent amounted to him depriving and prejudicing the Insurers’ rights which Insurers are liable for the limit Calvin is covered for under the Policy.  As a result, Calvin was not indemnified for this claim.

Points to Ponder

1. It is highly advantageous for both the Insurers and the Insured Practice [“IP”] that a panel lawyer is appointed at the outset of a claim to ensure interests are protected and prejudice is not caused to either party.
2. In majority of potential claims where a panel lawyer was appointed to take over conduct from the start, the circumstance was rectified without further escalation.
3. In order to defend IP’s claim effectively, it is every Insureds obligation under the Policy to cooperate with Insurers – this means to provide all relevant documents and information pertinent to the claim and to give full cooperation to the panel lawyer.  The sooner the panel lawyer understands your position, the more effective the management of the claim will be.
4. While some are under the impression that self-representation would save them on legal fees, time spent researching and preparing could gravely affect the lawyer’s actual “paying” hours instead.
5. Clients are consistently advised not to act in conflict of interest by their lawyers.  Taking your own advice may be the hardest pill to swallow but it is essential anyhow.  Hence, it is pertinent to remind lawyers that self-representation should not be the road to take.
6. For the simple reason of independent advice – lawyers who are faced with a claim are often clouded in their judgment.  It makes good sense to have an independent party evaluate the situation to recommend an unbias solution.

The content of this publication is intended to provide a summary and general overview on matters of interest.  It is not intended to be comprehensive nor does it constitute legal advice.  We attempt to ensure that the content is current but we do not guarantee its currency.  You should seek legal or other professional advice before acting or relying on the content.

* Editor’s note: Read our article on “Self- Representation: Every Rose Has Its Thorn” for a more elaborate discussion on this topic.