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Insurer can’t sue its own defense lawyers for malpractice: Court - Business Insurance Skip to content Register for free Search Search Log In Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Insurer can’t sue its own defense lawyers for malpractice: Court by Richard Sine Claims Disputes , E&O Apr 8, 2026 A liability insurer cannot pursue a malpractice claim against the lawyers it hired to defend a manufacturer involved in a climber’s fall, an appeals court in Washington state ruled. In Great American E&S Insurance Co. v. Gordon Rees Scully Mansukhani , Judge Ian Birk, reversed a lower court ruling and found that allowing the malpractice suit could create a conflict of interest between the insurer and the insured policyholder in cases when the insurer was reserving the right to deny coverage. In 2019, a climber was severely injured while using a safety device, called an auto belay, designed to tether him while climbing a gym climbing wall. He sued the Seattle-area gym where he fell and C3 Manufacturing, the maker of the device. C3 carried a $1 million policy with Great American and $4 million excess umbrella policy with Houston Casualty, a unit of Tokio Marine HCC. Great American stepped in to defend C3, but did so under a reservation of rights, meaning it kept open the option to later deny it owed anything. The defense unraveled as the lawyers hired by Great American made a series of missteps, according to the ruling. One attorney visited the gym dozens of times without disclosing those contacts in discovery; another moved to a firm that was simultaneously representing Houston Casualty in a coverage dispute against C3, creating a conflict of interest. Sanctions followed and a new defense team had to be brought in weeks before the trial. Great American ultimately paid $5 million to settle. As part of the settlement, C3 agreed to sign over its right to sue the defense lawyers to Great American for malpractice. Great American then sued the lawyers and their firms, claiming that their blunders led to a bigger payout. But Judge Birk ruled that the assignment of legal rights was impermissible. “Washington law is clear that defense counsel must serve the insured’s interests, and only the insured’s,” Judge Birk wrote. If the insurer could later sue defense counsel, the lawyers might start considering the insurer’s interests on questions such as how aggressively to push toward settlement. In the “tripartite relationship” between insurer, policyholder and defense counsel, the insurer already has a significant level of control, the judge wrote: “Through its control of the defense, ability to select counsel, and relationship with counsel — and the ability to terminate the relationship — the insurer is in a position to protect itself from risks of legal malpractice.” Related News Origin Specialty introduces hotel, motel program April 8, 2026 Insurer must cover mental health facility in sex harassment case: Court April 8, 2026 Baldwin Group teams up to launch construction captive April 8, 2026 Marsh Risk raises capacity in excess cyber facility April 8, 2026 Insurer must defend doctor accused of ‘fertility fraud’ April 8, 2026 Ski pass or pass on skiing? 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