CUMIS Counsel

Abstract

CUMIS Counsel or independent defense counsel is a term that comes from the seminal conflict of interest case in California, Navy Federal Credit Union v. Cumis Ins. Society Inc. This case holds that a liability insurance carrier must pay for independent counsel and not use its own selected counsel where coverage issues are reserved that create a conflict of interest between the carrier and the policyholder.

This article sets out the current law regarding a conflict of interest in a reservation of rights context in New York, Texas, California, Michigan, Ohio, Indiana, Illinois, Minnesota, Wisconsin, Kentucky, Tennessee, Connecticut and Massachusetts.

A number of ethical issues arise for an attorney advising a client who has received a reservation of rights letter from its liability insurance carrier. The case law of the 50 states differ widely. However, an attorney in all jurisdictions who advises a client has an ethical obligation to educate that client as to his rights, obligations, conflicts and risks in demanding cumis counsel or choosing his own attorney.

Keywords: Cumis Counsel, Reservation of Rights, Independent Counsel, Conflicts of Interest, Casualty Insurance