An Insured’s Right to Independent Counsel in Georgia

Whether the insurer has a right to select counsel for an insured when defending under a reservation of rights is a blurry topic in Georgia.  Under Georgia law, defending under a reservation of rights creates a conflict of interest.  In upholding its duty to defend its insured, the issue becomes whether the insurance company can appoint defense counsel unilaterally on behalf of its insured (as is the case in Florida) or whether the insured can choose their own counsel.  The case law indicates that an insured in Georgia can select their own independant defense counsel, but it must first reject the insurers offer of appointed counsel.  

In conflict situations, if the insurer appoints defense counsel, the insured is entitled to reject appointed counsel and hire their own counsel at the expense of the insurer. See Am. Family Life Assur. Co. of Columbus, Ga. v. U.S. Fire Co., 885 F.2d 826, 831 (11th Cir. 1989) (“The existence of a conflict of interest would have justified American Family in rejecting Boston Old Colony’s offer to provide a defense…. In such circumstances, Boston Old Colony would have been obligated to pay for American Family’s defense.”). 

Even if the insured accepts appointed defense counsel, the insured may still be entitled to hire independent counsel which the insurer may also have to pay for. Util. Serv. Co., Inc. v. St. Paul Travelers Ins. Co., 5:06-CV-207 (CAR), 2007 WL 188237 (M.D. Ga. Jan. 22, 2007) (“Am. Family Life held that the presence of a conflict of interest may enable the insured to retain independent counsel at the expense of the insurer.”).  The right to have the insurer pay for both appointed defense counsel as well as independent counsel is much less clear.  In Util Serv., the court simply made this holding in ruling on a motion to dismiss the insured’s request for independent counsel fees.  The motion to dismiss by the insurer was denied.

Accordingly, although an insured may reject appointed defense counsel in a reservation of rights situation and select their own counsel, the law on whether the insured can simply accept appointed defense counsel AND hire their own independent counsel at the expense of the insurance company is much less clear.

Explore posts in the same categories: Duty to Defend, Georgia Law, Right to Independent Counsel

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