 |
(A version of this article appears in the California Construction Law Reporter, published by the West Group.)
By James E. Acret
Most
liability policies give the insurer the right and duty to
defend the insured against suits. When there is a conflict
of interest between the insurance carrier and the insured,
California Civil Code §2860, subdivision (c) provides
that the insurer has an obligation to provide independent
counsel compensated at the rates actually paid by the insurer
to attorneys retained by it in the ordinary course of business
in the defense of similar actions in the community.
Here,
independent counsel billed hourly rates of $245 to $310
an hour for senior attorneys, but the carriers ordinarily
paid between $125 and $186 an hour. They offered to pay
$170.
The
court held that §2860 applies to insurance policies
that were in existence before its effective date of January
1, 1998. And, in cases in which more than one insurer is
obligated to provide for independent counsel, the court
held that a single rate limit applies collectively to all
insurers, and each is not required to pay its own ordinary
rates. San Gabriel Valley Water Company v. Hartford Accident
and Indemnity Company, 82 Cal.App.4th 1230, 98 Cal.Rptr.2d
807, 2000 Daily Journal D.A.R. 8793 (2000).
If you would like to receive legal reports and updates
more quickly, by e-mail, click here and fill out the mailing list form. If you would like to subscribe to our RSS feeds or learn more about RSS, click here.
For more information about books and other legal materials written by James Acret, click here and enter "Acret" in the site search engine.
©2000 ConstructionWebLinks, Inc.
|
