Civil claim settlement talks involving third parties and insurance company adjusters: When should lawyer conduct standards apply?

St. John's Law Review, Summer 2003 by Parness, Jeffrey A

For pre-lawsuit conduct we should chiefly look to administrative agency or general assembly guidance, with lawyer conduct standards occasionally providing insights. Thus, it seems preferable for an administrative agency or a general assembly to speak to most of Christy Klein's actions in adjusting the third-party claims of the Joneses. Should a court speak, it should usually do so through written standards on the practice of law and not, as in Jones, on a case-by-case basis.

For post-lawsuit conduct we should chiefly look to high court rule making involving either professional legal services or civil procedure standards. Civil procedure standards should govern adjusters who talk settlement in courthouses, while professional legal services standards should typically regulate third-party adjustment talks outside courthouses to the extent there are no unauthorized legal practice barriers, especially where insurance company adjusters operate under the direction of lawyers.

The time is ripe to discuss and implement broad legal guidelines on third-party adjusting. Recent cases suggest there can regularly arise confusion, serious instances of adjuster misconduct, and separation of powers issues in circumstances involving third-party adjusters.

JEFFREY A. PARNESS[dagger]

[dagger] Professor of Law, Northern Illinois University College of Law; B.A., Colby College; J.D., University of Chicago Law School. Thanks to Tim Denny, my research assistant, and Therese Clarke and Charles Condon, Northern Illinois University law librarians, for their help.