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A tripartite relationship forms among defense counsel, the insurer, and the insured when the insurer retains counsel to defend the insured in a lawsuit pursuant to the duty to defend in a liability insurance policy. Some states, including Alabama and Minnesota, treat the insured and the insurer as the dual clients of retained defense counsel. Other states, including Arizona and California, consider the insured the “primary client,” suggesting defense counsel also owes a duty to the insurer. Texas and New York treat the insured as the only client.

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Regardless of whether defense counsel has two clients, a primary client, or a single client, the tripartite relationship is fraught with potential conflicts. Justice Raul Gonzalez of the Texas Supreme Court described the uneasy relationship defense counsel must navigate as follows:

The duty to defend in a liability policy at times makes for an uneasy alliance. The insured wants the best defense possible. The insurance company, always looking at the bottom line, wants to provide a defense at the lowest possible cost. The lawyer the insurer retains to defend the insured is caught in the middle. There is a lot of wisdom in the old proverb: He who pays the piper calls the tune. The lawyer wants to provide a competent defense yet knows who pays the bills and who is most likely to send new business. This so-called tripartite relationship has been well documented as a source of unending ethical, legal, and economic issues.

State Farm Mut. Auto. Ins. Co. v. Traver, 980 S.W.2d 625, 627-28 (Tex. 1998) (Gonzalez, J. concurring and dissenting) (citations omitted).

To read the full paper, please click <a href="https://admin.blankrome.com/wp-content/uploads/2026/03/aba_iclc_-_paper_2024.pdf" id="38946">here</a>.

"Potential Conflicts: Retained Counsel’s Duty To Zealously Represent the Insured vs. The Insurer’s Right to Control the Defense," was prepared for the American Bar Association by Craig L. Reese, Marjorie C. Nicol, and Jared Zola on March 9, 2024.

Potential Conflicts: Retained Counsel’s Duty To Zealously Represent the Insured vs. The Insurer’s Right to Control the Defense

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Potential Conflicts: Retained Counsel’s Duty To Zealously Represent the Insured vs. The Insurer’s Right to Control the Defense

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