A recent decision provides insight on the application of the attorney-client privilege to communications between an insurance professional, who was also an attorney, and the insured. Generally, all claims are assigned to an insurance professional to monitor and, if applicable, to strategize with insurance-appointed counsel. It is widely accepted that communications between defense counsel, the insurer, and the insured are protected by the attorney-client privilege pursuant to the so-called tripartite relationship. However, there is no privilege that applies to communications only between insurer and insured. The plot thickens, however, when the insurance professional is also an attorney.
Communications between claims professionals and the insured are often one of the plaintiff’s targets during discovery. These communications may contain an interview of the insured, details of the underlying incident, or a first-hand account of the dispute before the carrier assigns counsel and therefore the materials usually are discoverable. In the matter of Walter v. Travelers Personal Insurance, the claims professional was also an attorney who played a “dual-role.” According to U.S. Magistrate Judge Martin C. Carlson of the Middle District of Pennsylvania, the adjuster was acting in his role as counsel for the insured during the subject communications and therefore the documents were not discoverable.
“Upon review of the documents themselves in their entirety — and not only isolated selections of certain correspondence — we are satisfied that coverage counsel was, in fact, serving the client in an attorney-client capacity, and not in some other function such as a business adviser or claims adjuster.”
Counsel for the party seeking the materials intends to file an appeal. Reportedly, counsel sees this decision as an opportunity for insurers to shield materials from production by assigning claims professionals who also “happen to be” attorneys. We will keep an eye on this decision during the appellate process as it has significant implications on the role of claims professionals and their communications with their insureds.