May 27, 2013
Policy Concerning Attorneys’ Conflicts of Interest and Business Conflicts
On occasion an attorney who is representing or has represented CNA and/or a CNA insured is asked to represent a party that is adverse to CNA or a CNA insured. The Policy stated herein sets forth guidelines to assist both the attorney who is confronted with such a situation and the CNA employee to whom an inquiry is made concerning such a situation. Nothing in this Policy is intended to circumvent any State ethical canons concerning conflicts of interest.
CNA’s concern is protection of its and its affiliated underwriting companies’ confidential and privileged information. Accordingly, CNA will evaluate each conflict situation individually. There are two types of conflicts: ethical and business.
CNA seeks to minimize and avoid situations where confidential information may pass from counsel to an entity that is adverse to CNA. Prior to accepting an engagement to represent an entity, counsel has an ethical obligation to advise CNA of any situation in which confidential information may pass from counsel to an entity that is adverse to CNA. Generally, CNA will attempt to work with counsel to determine if the firm possesses confidential information and whether there is a way to create safeguards to protect CNA so that waiver of the conflict may be considered
In addition, CNA is concerned about business conflicts. A business conflict arises when a firm providing legal services to CNA knowingly pursues actions against CNA insureds. Recognizing that the definition of business conflict encompasses a broad category of situations, it is the position of CNA that an attorney should not knowingly pursue actions on behalf of persons or entities that are adverse to interests that are insured by CNA.
CNA is contacted daily by excellent firms seeking to provide legal services. You and your firm should be cognizant of the fact that CNA has expended a great deal of time and energy in establishing a relationship with your firm. In view of the fact that CNA is sending business to your firm in lieu of other firms, you should recognize that CNA does not look favorably upon its defense counsel pursuing actions that are adverse to CNA’s financial interests. If an attorney does work for CNA, CNA believes the attorney should not pursue actions against CNA insureds on behalf of plaintiffs. Such a situation constitutes a “business conflict,” and may constitute a conflict of interest, depending on the circumstances.
In those instances where a potential conflict of interest or business conflict exists, the following procedures should be followed by the attorney and the CNA employee who is informed of such a situation:
1) Counsel should review the CNA Entity List to determine whether any of the entities identified there is or will be involved in the matter in question. Counsel should note that CNA could be directly involved as a party or indirectly involved as an insurer of the party that Counsel is being asked to pursue or to advise about. CNA expects Counsel to conduct an appropriate investigation in either case.
2) An ethical conflict of interest exists if the representation of a client will be directly adverse to CNA or if there is a significant risk that the representation of one or more clients will be materially limited by the lawyer’s responsibilities to CNA. A business conflict exists if the representation of a client will not be directly adverse to CNA, but will be adverse to CNA’s interests or the interests of a CNA insured.
3) An attorney who is considering undertaking the representation of a party that is adverse to either CNA or any of its affiliated underwriting companies or adverse to a CNA insured should inform CNA’s Legal Services Group of the situation in writing. The Legal Services Group will consider the relevant facts and make a decision as to whether a conflict of interest exists and, if so, whether to waive the conflict. CNA will consider each such situation on a case-by-case basis in order to make an appropriate decision given the particular facts and circumstances. In some instances the conflict of interest may be waived with the proviso that certain precautions will be taken by the attorney’s law firm in order to protect CNA’s interests. In other instances a conflict of interest may not exist, but a business conflict may exist. If a business conflict exists, CNA may wish to take action based upon that business conflict, if the firm chooses to undertake representation of the party whose interests are adverse to those of CNA. CNA will consider each such situation on a case-by-case basis in order to make an appropriate decision given the particular facts and circumstances.
4) To assure the continuation of a strong working relationship between CNA and its counsel, an attorney who is considering undertaking the representation of a party that is adverse to an interest that CNA may insure should contact the Legal Services Group to inform them of this situation. If a business conflict may exist, the Legal Services Group will ask that a request for a waiver be submitted in writing. CNA will consider each such situation on a case-by-case basis, in order to make an appropriate decision, given the particular facts and circumstances.
5) If an attorney discovers that he or she is representing a party who is adverse to a CNA insured, CNA requests that the firm advise the Legal Services Group of this situation, in writing. CNA will contact the firm if further information is needed in order to determine whether an ethical or business conflict exists.
6) Upon completion of a review of the facts, Legal Services will inform the attorney of the decision that has been made, in writing, and will provide a copy of this written decision to the business units affected by the decision. If a decision has been made to waive a conflict of interest subject to the utilization of ethical walls or other protective devices, these conditions will be stated in the letter. The attorney should then inform the Legal Services representative, in writing, whether these conditions are acceptable to the firm and confirm that the firm will take the actions required to protect the interests and confidences of CNA.
7) If a conflict of interest or a business conflict arises during the course of litigation, rather than at the outset, the procedures set forth above should be utilized by the attorney in the same manner as if the conflict had arisen and been identified at the outset of the litigation.
FREQUENTLY ASKED QUESTIONS
Question: My partner has been approached to represent a client that will be adverse to CNA in a subrogation matter. Do I need to inform CNA of this situation? Will CNA waive the conflict?
Answer: Yes, you do need to inform CNA of the situation. You should contact Legal Services at CNA and inform them of all the relevant facts, in writing. CNA will consider the facts of the particular situation and, after conducting an appropriate review of the facts, will let you know whether the conflict will be waived and whether any conditions attach to the waiver.
Question: I represent a plaintiff in an automobile accident case. I have just learned that CNA (or a CNA entity) insures the defendant and/or provides the underinsured coverage for the plaintiff, and I must pursue that coverage. I have never represented CNA directly, but I have represented CNA insureds. Do I need to inform CNA of this situation?
Answer: Yes, you do need to inform CNA of the situation, even if you view it as constituting a business conflict, but not a conflict of interest. You should contact Legal Services at CNA and inform them of all the relevant facts, in writing. Legal Services will advise you if further action is necessary.
Question: I represent a defendant in a case that CNA was not originally involved in, either directly or as an insurer. I have just learned that a newly added defendant, whose interests may be adverse to those of my client, is insured by CNA. Do I need to inform CNA of this situation?
Answer: Yes, we do ask that you inform Legal Services of the situation. It is unlikely that CNA will take any action as a result of this situation over which you had no control.
Question: Why would CNA consider taking action against my firm simply because of the existence of a “business conflict”?
Answer: CNA is cognizant of the fact that removal from the Panel of Approved Firms, ceasing to send additional matters to your firm, and transferring of files are very serious matters for your firm. You and your firm should be cognizant of the fact that CNA has expended a great deal of time and energy in establishing relationships with firms. In view of the fact that CNA is sending business to your firm business in lieu of other firms, CNA will not allow its defense counsel to pursue actions adverse to its financial interest. When a firm makes a choice to accept a matter that creates a business conflict, the firm must live with the consequences of its actions.
Question: Legal Services has refused to waive a conflict of interest and I disagree with that decision. Is there any process by which I can “appeal” this decision to a higher level?
Answer: Yes. If you believe that the decision was not appropriate, given the facts and circumstances of the case and your relationship with CNA, you should ask that the waiver request be elevated to a higher level within CNA for review.
Question: To whom should I initially bring my conflict waiver requests?
Answer: If your firm does work primarily for CNA’s CNA Commercial/Standard Lines, you should address your request to:
Director, Legal Services
CNA Commercial/Standard Lines
333 South Wabash, 25S
Chicago, IL 60604
Phone: (312) 822-6523
Fax: (312) 817-3194
If your firm primarily does work primarily for CNA’s Specialty Lines, you should address your request to:
Director, Legal Services
Global Specialty Lines
333 South Wabash, 25S
Chicago, IL 60604
Phone: (312) 822-2397
Fax: (312) 755-7195
If your firm primarily does work for CNA’s Environmental and Mass Tort Claims area, you should address your request to:
Patricia A. O’Byrne
Senior Counsel—Strategic Claims and Coverage Litigation
CNA Law Department
1249 South River Road
Cranbury, NJ 08512
Phone: (609) 860-2318
Fax: (609) 495-8887
If your firm primarily does work for CNA’s Construction Defect area, you should address your request to:
Director, Legal Services
Construction Defect Claims
P.O. Box 2469
Brea, CA 92822-2469
Phone: (714) 255-2533
Fax: (714) 256-7657