Chaney Firm scores win for Arkansas insurance policyholders

The Chaney Law Firm recently won a hard-fought victory over Farmer's Insurance Group about whether the insurance company could use lawyers employed by the company to represent the company's customers. Nathan Chaney presented the case to Pulaski County Circuit Judge Chris Piazza. Nathan argued that Farmers' practice of representing customers violated an Arkansas law that prohibits corporations from practicing law, which has been the law in Arkansas since the 1920's. Corporations can represent themselves in lawsuits or in transactions with other people, but cannot make a business out of representing other people in court.

Nathan also argued that the attorney employed by Farmers had a conflict of interest as a result of his employment by Farmers. The conflict of interest arises because of the risk that an attorney employed by an insurance company will not be able to give his "undivided fidelity" to the policyholder. Furthermore, it creates an appearance of impropriety when a lawyer, who has a company car and credit card and is paid exclusively by an insurance company, says he can set all those things aside and make decisions in the best interests of the policyholder.

The result means that insurance companies in Arkansas will have to hire independent attorneys to represent policyholders. This is known as the duty to defend, and every Arkansan with an insurance policy pays premiums so that a lawyer will be hired on their behalf if they are ever sued. People who have been involved in lawsuits know that it is a long process, and an attorney who can take an independent look at the pros and cons of your case is a necessity.

The Chaney Law Firm is proud to protect the rights of ordinary Arkansans. If you have ever been represented by a lawyer employed by Farmers, we would be happy for you to contact us about remedies you may have against Farmers for engaging in the unauthorized practice of law.

Update on 2013-04-25 03:16 by Nathan Chaney

We won this appeal! Read more here, or grab the opinion here.

Update on 2010-05-28 20:56 by Nathan Chaney

Nathan will be teaching a continuing legal education class on the unauthorized practice of law by insurance companies at the Arkansas Bar Meeting on June 10 at 10:45 a.m.

Update on 2010-12-15 21:37 by Nathan Chaney

Farmers' lawyer appealed this case. We'll post periodic updates on the appeals process on our main blog.

Update on 2013-02-21 05:12 by Nathan Chaney

We filed our appeal brief in this case today. You can read the article and find the brief here.