Defense counsel retained by liability insurance companies to represent policyholders face potential conflicts of interest sometimes. Whether and when these potential conflicts ripen into claims for damages depends on the law of the jurisdiction and the facts of the case.
In Arden v. Forsberg & Umlauf, P.S., ___ Wash. 2d ___, 402 P.3d 245 (2017), the Supreme Court of Washington held that the policyholders-clients could not claim damages in that case from a retained law firm's alleged breach of duty when the law firm failed to disclose an alleged conflict based on a previous relationship between the firm and the policyholders' liability carrier.
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