INSURANCE LAWYERING:

SOME MILD CURRENT CURRENTS

Michael Sean Quinn, Ph.D., J.D., C.P.C.U. Etc.*

Insurance law and practice hasn’t changed much
in the last couple of decades. In part that is because insurance law itself is
in the doldrums. Doctrinal stagnation has been inflicted upon the practice inflicted
upon the community of coverage. Some have always regarded  the
practice of insurance law as old fashioned and boring. To some extent,
however, things are changing.

So what’s new? There are a number of currents
affecting practice. There are several mild currents; some are subtle
expressions of change. Not everyone sees these mild changes or fully grasps
their significance.  I will discuss major
changes in another essay. For this essay I will use events and trends in Texas
a potentially suggestive paradigm of what’s going on all over the country. Major and revolutionary changes will be discussed in another essay. 

First current: Texas insurance lawyers, as well
as other states, now have specialized professional firms representing
policy-holders. Some of these are larger firms representing larger clients in
lots of area; some are tiny, so-called boutique 
firms represent clients both large and small in special areas; some are
specialized departments in mega-firms, and so forth. The rise of the
policyholder firm is one of the most significant developments of the last 30
years (plus a few more, maybe). Anderson Kill, perhaps the first of the
bunch, was created in 1969. It has been without question the best at self-promotion. In fact, the surge of
such firms is certainly one of the most interesting developments of our era so
far.  For one thing, it has increased the
quality of performance. Now its specialist against specialist; the learned
against the learned. Complexities and subtleties  are known and appreciated across the
board.  Of course, this development is
not restricted to Texas.

Second source of change: another current in
Texas  practice, I think, has been the
UT-CLE on Insurance Law, already mentioned, which began to develop around 20+
years ago. In the last few years the Insurance Section and UT-Law-CLE have
cooperated in putting together and producing the programs to great effect.  The same sort of thing is surely available for
the ABA and perhaps other state bar associations.

Third change: auditorium CLEs are no longer the
only educational sources dished out by insurance lawyers to themselves, other
lawyers and to their clients. There are also original online CLEs; formerly
live CLEs are re-offered on line; there are webinars; and law firms put on their
own courses available to their customers and clients, but therefore also often
made available also to lawyers. Online, there are all sorts of  short publications (blogs) regarding cases,
statutes, rules, philosophy, techniques, and more.   Often they present how-to tips to other
lawyers and/or “civilians.” The truth is, I learn much from them about the many
things of which I know no or  little,
and/or have rather thin and/or faulty knowledge.   An excellent example of this sort of
publication are those on the Deep Water
Horizon cases put out by Haynes and Boone and by several other law firms. A
great many more law firms are now involved producing blogs, often called
“Alerts,” on a variety of insurance law topics, often among others. 

Fourth, in Texas, we now have “The Insurance
Section of the State Bar of Texas,” and other states are developing similar new
specializations, thougth4e ABA has not. Participatory activity in it has spread
rapidly across both sides, as it were, of the central aisle.  All of this might strike one as the natural
evolution of the practice—simply a routine economic cycling of the organization
of the lawyer-insurance joint industry. But that’s not how it happened, and
it’s not how it continues to happen. 
(Keep in mind that insurance companies are probably sued more than any
other set of organized companies and that they are involved in law suits at a
rate several times that size.)

The section has made “insurance law workers,”
as a Marxist observer might put it, much more of a learned, interactive,
friendly, politely argumentative, “discussion-ing” (or “dialogic”), somehow and
to some extent, unified  bunch, and that
has been, is and will continue to be exciting. 
Judges love to come and talk at our CLEs, more than they do others, I’ve
heard, and I even witnessed and illustrative event once. The Section has a
quarterly journal with plenty to publish; delivery is now available on line;
and—perhaps most interestingly–it has a digital archive of all sorts of
interesting writings.  People active in
the section love it, and righty so! This very CLE program illustrates my point
nicely. These phenomena not true only in Texas, though, I’m sure Texas has done
it best.

This CLE also illustrates a fifth point, and
that is the extent to which the necessary use of insurance law (and therefore
the practice of insurance law) has become a genuinely diverse and pervasive
specialty for a whole variety of professionals. Over the last 15 years or so,
the practice of insurance law now permeates virtually all other areas of the
law. Where here is risk—where there are perils—there is insurance. Where
lawyering is afoot, insurance is always nearby–sometimes clearly perceivable,
sometimes in the bushes. Virtually all large business deals, for example, mergers
or/and acquisitions, whether purely domestic or international, have complex
insurance components, and they are more and more being turned over to what I’m
calling specialists in insurance contracts and their provisions.  Virtually all large companies have insurance
lawyers in their General Counsel Office, and it amazing how many lawyer are to
be found in specialty departments of large insurance brokerage houses and
accounting firms.

Seventh, one of the most interesting purely
intellectual event of the last couple of decades are the developing drafts of
the RESTATEMENT (THIRD) OF THE LAW OF LIABILITY INSURANCE. This has certainly
been an important process, and its official publication will be a significant
event. The American Law Institute, its organizer, sustainer and eventual
publisher describes it as a “Restatement [that] covers the law of contracts in
the liability insurance context, liability insurance coverage, and the
management of insured liabilities.”[1] Interesting, but not much
used yet, and no revolution to be found here, even upon publication. It will
certainly not trigger the shock in the legal system that happened with the
RESTATEMENT (SECOND) OF THE LAW OF TORTS.[2]  (There is no “FIRST.” Talk about bad ideas.
“Here is the second of the first book. It is not a revision of anything, since
there was no first edition.” Very strangely, the ALI brackets “First,” “Second”
and “Third” by dates and not by edition number. )

On the surface, then, it appears that not much
new that is striking and hugely transformative has happened or is happening. Or
so it might seem. Of course, there are “old time” cases grinding along; this
will go on forever, or so long as there a people in conflict.  The apparently increasing number of huge
storms with origins at sea and hail damages starting in many places both seem
to be increasing first party, tangible property insurance work. Most of these
cases are relatively small; in contrast, controversies arising out of Sandy are
keeping a some Eastern seaboard coverage lawyers working well over full time,
plus a few from elsewhere.  Insurers are
taking lots more legal work in-house and that seems to be having an impact on
the business side of the profession. Serious insurer bad faith cases appear to
be dropping. The number of new, large companies—some coming from mergers,
takeovers, and the like–are impacting the work of some sophisticated coverage
lawyers, mostly at large firms. And demands by insurers for appraisals is
diminishing must coverage work.

I am not suggesting that there are not
marvelous, older-type complex cases flowing down the pipeline and there are
truly excellent opinions being written.[3] A number will be studied
in the next generation of law school case books. A number  of the opinions are masterful and some are
quite subtle.[4]
And a few are now famous, such as In re
Deepwater Horizon,[5] together with a string of
related cases. Alas, fame seldom lasts.

A big difference is emerging in complex,
big-to-huge old-time coverage, and that is the emergence of e-discovery where
there are piles upon piles of electronically stored information.

The aging of some (a big sum) of the legal
profession is noticeable. Experienced coverage advocates turn gray, though—one
would like to believe—slower than most others. 
I’m not sure what the effect of this generational change will be over
the short run-a decade or so.  Over the
long run, it will have no impact whatever, except that the names of some law
firms might change a little.

*Michael Sean Quinn, Ph.D., J.D.1300 

West Lynn Suite 208

Austin, TX 78703 

512-656-0503Fax: 512-344-9466Email: mquinn@msqlaw.com 

[1]
Drafts of versions of parts of it can easily be found on the Internet. Use
“Restatement of the Law: Liability Insurance.”

[2]
Not even it shocked the legal world quickly. Part of the problems is that
lawyer are largely uninterested in reading and studying restatements of the law
in general.  This has been a professional
mistake. The ALI has been publishing Restatements since the 1920s and they are
marvelous learning tools, and in a few cases transformative tools.  I have never understood why lawyers don’t
love them. Nothing provides better systematic orientation that a relevant
restatement.

[3]
U.S.Metal, Inc. v. Liberty Mutual Group, #14-0753 (Tex. December 4, 2015)(CGL
coverage).

[4]
AIG Speciality Ins. Co. v. Tesoro, #15-50953 (5th Cir. October 17,
2016)(discovery rule).

[5]
In re Deepwater Horizon, #13-0770 (Tex. 2015)(oil spill and additional insured)