Insurer-Chosen Counsel Represents Both Insured and Insurer
The Nevada Supreme Court upheld the disqualification of a law firm representing an insured in a bad faith claim in Nevada Yellow Cab Corp. v. Dist. Ct. The attorney working on the case had previously been a partner in the firm the insurer had hired to defend the insured in the underlying personal injury matter. While he had not worked on the underlying claim, an associate who had joined him at his new firm had done extensive work on the case, and had acquired information regarding the insurer's handling of the claim. The Court adopted the majority rule that counsel hired by the insurer to defend the insured represents both the insurer and insurer. The previous rules regarding conflict, which did not permit creation of a "Chinese wall," applied to this case.
