Nathan teaches class on victory in recent appeal

Nathan Chaney taught a CLE hosted by the Arkansas Trial Lawyers Association last Friday. The theme of the day of CLE was insurance coverage issues, and Nathan taught about his recent appeal in which he disqualified a lawyer employed by an insurance company.

The seminar followed the format of the one Nathan gave last summer to the Arkanas Bar Association. However, this seminar focused more on the fallout surrounding the disqualification of the Farmers Insurance Company lawyer (you can download the presentation here). Essentially, Farmers will have to fulfill its bargain with its policyholders by hiring independent lawyers to represent them. Furthermore, Farmers may have defaulted its policyholders on many cases in which its employee-attorneys answered lawsuits. Fortunately, Farmers alone will be the responsibility of taking this calculated risk, not the policyholders.

One question at the CLE was, “why do you care what the insurance companies do? After all, wouldn’t it be better for an plaintiff’s lawyer to have a 9-to-5 in-house lawyer on the other side, rather than a skilled lawyer in a big firm?” My answer to that question was this: all people who have a contractual right to a lawyer deserve skilled representation given with undivided loyalty. If I get sued, I want the best lawyer my insurance company can find to represent me — don’t we all feel that way?

We, as lawyers, take an oath to uphold the justice system. And at the heart of our justice system are lawyers who exercise independent, professional judgment. Here at the Chaney Law Firm, we take our oath seriously, even when it’s inconvenient. That’s why we objected to Farmers appointing its own lawyer, and that’s why I gave a CLE on the topic last week.

Chaneys win appeal in Arkansas Supreme Court

We’ve written several times about our ongoing case involving an insurance company trying to represent its customers using employee-attorneys. We’re very pleased to announce that the Arkansas Supreme Court published its decision recently, and the Chaneys scored a complete win.

Our client was hit by a negligent driver. Farmers Insurance Company hired a well-known defense firm to represent the negligent driver. After about four months, however, Farmers tried to substitute its own in-house, employee-attorney into the case to represent the negligent driver. At that time, Nathan Chaney opposed this substitution on the grounds that it was illegal and unethical.

The Arkansas Supreme Court sided with Nathan’s argument. The Court applied an Arkansas statute that has been on the books for over 50 years. According to the statute, what Farmers was trying to do is the unauthorized practice of law. While Farmers’ lawyer challenged the constitutionality of the statute, it was upheld on appeal. Farmers also claimed that our firm could not raise this issue, but the Court summarily rejected that argument.

The Court’s decision was split 4–3 (our Supreme Court only has 7 justices). The remaining 3 justices would have held the statute unconstitutional because only the Arkansas Supreme Court can govern the practice of law in our state. However, those 3 justices also sided with our argument, since they held in a concurring opinion that “[a]n attorney may not serve two masters” because the attorney’s loyalties would be divided. A lawyer’s client has the right to undivided fidelity from the lawyer, and a corporation cannot provide the required loyalty. However, the Court reserved its strongest language for the divergent interests an insured and his insurance company have:

Further, an insurance carrier, for example, is a business and is naturally concerned with profits and retaining as much of the insurance premiums as possible, which translates in a lawsuit into a desire to pay as little in fees, costs, and judgments as possible. The insured’s interests are not the same as the insurance company’s, and those interests may vary greatly.

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The relation of an attorney to his client is pre-eminently confidential. It demands on the part of the attorney undivided allegiance, a conspicuous degree of faithfulness and disinterestedness, absolute integrity and utter renunciation of every personal advantage conflicting in any way directly or indirectly with the interest of his client.

As we have said in the past, this case is just one example of the way the Chaney Law Firm fights for the rights of individual Arkansans every day. The right to competent and unbiased counsel has been reaffirmed for every Arkansan who has an auto insurance policy, and we are proud to be protecting ordinary Arkansans against the interests of corporate greed.

Chaney Law Firm fights for the right of independent counsel for insurance policyholders

The Chaney Law Firm recently filed a brief with the Arkansas Court of Appeals advocating for the right of insurance policyholders to be represented by independent lawyers. The brief follows the Chaney Law Firm’s successful opposition to an insurance company’s attempt to employ its own lawyer to represent a policyholder, as reported here earlier this year.

The Chaney Law Firm is asking the Arkansas Court of Appeals to uphold the trial court’s ruling that the inurance company’s practice constitutes the unauthorized practice of law, and creates an impermissible conflict of interest for the insurance company’s lawyer. Aside from the legal argument that corporations cannot practice law for others in our state, the brief argues that the insurance company lawyer cannot give his client undivided fidelity when, at the same time, he must answer to his superiors at his insurance company.

This case is just one example of the way the Chaney Law Firm fights for the rights of individual Arkansans every day. In this situation, we are trying to make sure that policyholders get an unbiased attorney so those policyholders get the full benefit of the bargain out of their insurance policies. Without an independent lawyer, the policyholder faces greater odds of being dragged through the court system for years as an innocent pawn, or winding up with a judgment against their personal assets. Insurance is for both economic and emotional security, yet too often policyholders have to fight desparately to get the benefits to which they are entitled.

The Chaney Law Firm’s argument also seeks to uphold the professional independence of lawyers, even for lawyers who are afraid to represent themselves. Since many law firms represent insurance companies, they are afraid to take a stand on this important issue for fear of being blackballed by those insurance companies and losing future business. Even lawyers need other lawyers to stand up for their rights, and the Chaney Law Firm is proud to be doing just that.

Nathan Chaney teaches class on emerging legal and ethical issues

This morning, Nathan Chaney taught his class on the legality and ethical issues surrounding the insurance industry’s current attempts in Arkansas to represent policyholders using employee-attorneys. You can download a copy of the course materials here and a copy of Nathan’s presentation slides here.

Nathan enjoys giving back to the legal profession by educating fellow attorneys on emerging issues of law, and he appreciates the participation by the attendees of the class. Special thanks goes to Toof Brown, who was Nathan’s opponent in a recent case but was gracious enough to attend and lend his perspective.

Nathan Chaney to present a seminar at the Arkansas Bar Meeting

Nathan Chaney will present a seminar this Thursday, June 10, from 10:45–11:45 a.m., at the Arkansas Bar's Annual Meeting entitled "In-House Insurance Defense Counsel: Permissible Cost Saving Measure or Impermissible Conflict of Interest."

Nathan's seminar will discuss the legalities and ethics surrounding insurance companies' attempts to represent policyholders using attorneys employed by those same insurance companies. Nathan recently won a contested hearing on this issue, which was the subject of a previous post here.

We hope to see you at the Arkansas Bar's Annual Meeting!