LAW FIRMS, INSURER SANCTIONED

NYLJ 6/20/07

2. LAW FIRMS, INSURER SANCTIONED

2. Makes you wonder about some interpretations of the term ‘fiduciary duties’ owed by counsel to client. By now it is understood that delaying tactics are part and parcel of the patient ploys in attorney/client relations, taking longer to get to trial being merely a card in the hand of the players at the poker table. In that, the counterclaims (“I raise”) and motions to preclude or set aside or dispute of jurisdiction or of proper service (“I see you and raise”) before they enter the courthouse (“I call”) are all what can turn the felt forum into a bargaining table.

Still, destroying evidence, pretending you didn’t know it existed or stating that the files of the chief underwriter in an insurance case were not considered relevant—that’s just opening the door for malfeasance. And for what? The bet might payoff? Sure, that’s what you ante up for in the first place. It’s not like the insurer can’t afford to make good on their policy, though, is it?

So then, it comes down to the old formula: which came first, the chicken or the egg? The insurance company was clearly laying the eggs by deleting the electronic files, as well as scrambling them by claiming no knowledge of them, when the e-mail trail is as easy to follow as paper. So, a “culpable state of mind” can exist, even it is a Swiss-based conglo-giant. And the other? “Counsel’s failure to recognize the importance of this document and produce it in a timely fashion, especially when alerted to it by opposing counsel, also constitutes a violation of discovery obligations.”

What defense then is “inadvertence”? “Not apt,” said the judge. “And a finding of negligence or worse would be a more appropriate characterization.”

Which seems to call their bluff, alright!