When Must Staff Counsel Reveal Their Identity?
While all but two states permit insurers to use staff counsel to represent their insureds, many have adopted rules requiring defense counsel to clearly explain that they are employees of the insurance company. Yet how can counsel do so in a trial context without improperly introducing the fact of the existence of insurance, to the prejudice of insured and insurer alike?
Five years ago, the Florida Supreme Court adopted a new Rule 4-7.10 back in 2003 requires staff counsel to advise their insured client of their relationship at the very outset of the representation. On the other hand, staff counsel need not disclose their relationship with their insurer during the trial or representation of the policyholder as Florida courts have recognized the public policy of not disclosing the existence of insurance coverage to juries.
Despite this seemingly sensible resolution of the issue, the same problem resurfaced in West Virginia, a state that often seems to create headaches for insurers..
The facts in Nationwide Mut. Ins. Co. v. Karl, No. 33651 (W. Va. February 14, 2008) concerned an auto case in which Nationwide assigned its staff counsel to defend the insured defendant. During voir dire, the plaintiff proposed that the jury panel be asked whether any of the prospective jurors had a relationship with the members of defense counsel's law firm, which was identified as the "Nationwide Trial Division." After the judge refused, the defendant sought a continuance so that it could appeal the ruling. Although plaintiff's counsel offered to withdraw the request to avoid a continuance or delay of the trial, the judge insisted on giving the original proposed question, stating that he felt that this was an important issue to resolve given the large number of cases on his docket in which the Nationwide Trial Division was involved. Nationwide thereafter filed a Petition for Writ of Prohibition and the trial was continued while the appeal proceeded.
In its opinion, the West Virginia Supreme Court grappled with two conflicting concerns. On the one hand, identifying potential personal prejudice is an important aspect of voir dire. On the other hand, rules of court bar the introduction of information about available insurance coverage for fear that it may prejudice juries and result in higher verdicts.
While attempting to balance these concerns, the Supreme Court refused to find that the rule against introducing evidence of insurance should bar any inquiry into the affiliation of defense counsel, citing similar holdings from Indiana and Missouri. Despite Nationwide’s contention that such a requirement would improperly inject the issue of insurance coverage into the trial, the Supreme Court agreed with the trial judge that inquiry into whether a prospective juror is associated in some manner with the Nationwide Trial Division was a proper subject of voir dire.Nevertheless, in recognition of Nationwide's concerns, the Supreme Ccourt recommended that a different method of inquiry be used whereby jurors would only be asked if they had any interest with respect to the Nationwide Trial Division without specifically identifying its relationship to defense counsel
