Author granted license

Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International

Document Type


Publication Date





Oxford University Press




A pervasive problem in the settlement of liability litigation arises because liability insurers bundle their promise to indemnify the insured with a promise to represent the insured in settlement and litigation [see, e.g., Beckwith Machinery Co. v. Travelers Indemnity Co., 638 F.Supp. 1179 (W.D. Pa. 1986)]. Standard policies not only require the insurer to pay for legal representation but, more importantly, give the insurer the privilege of controlling the litigation and settlement process. The problem is how to resolve the conflict of interest between the insurer and the insured that may arise during settlement negotiations. This conflict is manifest when the insurer rejects a settlement offer within the policy limits and elects to pursue trial. 1 Inevitably, the insured defendant is displeased ex post following a damage judgment in excess of the insurance coverage. In this article, I evaluate the impact of this conflict under two different legal regimes.

Link to Publisher Site Link to Publisher Site (BU Community Subscription)



To view the content in your browser, please download Adobe Reader or, alternately,
you may Download the file to your hard drive.

NOTE: The latest versions of Adobe Reader do not support viewing PDF files within Firefox on Mac OS and if you are using a modern (Intel) Mac, there is no official plugin for viewing PDF files within the browser window.