Is the Carrier also the Client?

Recently, the Florida Supreme Court accepted jurisdiction and set for oral argument the matter of Arch Insurance Company v. Kubicki Draper, LLP.  Arch asked the Fourth District Court of Appeal to certify the following question to the Florida Supreme Court: WHETHER AN INSURER HAS STANDING TO MAINTAIN A MALPRACTICE ACTION AGAINST COUNSEL HIRED TO REPRESENT THE INSURED WHERE THE INSURER HAS A DUTY TO DEFEND. In the underlying case, Arch alleged that Kubicki Draper, LLP, a sizeable state-wide Florida law firm whom it hired to defend an insured, did not timely assert a viable statute of limitations defense, which in turn, caused Arch to have to pay a large settlement (within the policy limits) that may have otherwise been avoided.  Kubicki won summary judgment by asserting that Florida law limits standing on suits for attorney malpractice to only the client-insured, with whom the firm has privity of contract.  On appeal, Arch conceded that there was no Florida case on point that extended the privity from insured to insurer, nor cast the insurer as an intended third-party beneficiary of the attorneys’ advice and counsel (the lone exception recognized in Florida law).  Still, Arch asked the Fourth DCA to consider relevant federal case law that “guessed” how Florida courts might rule on such a question, and put forth a public policy argument that lawyers are insulated from malpractice suits if the insurer is unable to sue on behalf of its insured for a lawyer’s negligence. The Fourth DCA ultimately incorporated the trial […]

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