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Chaneys win appeal in Arkansas Supreme Court

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We’ve written several times about our ongoing case involving an insurance company trying to represent its customers using employee-attorneys. We’re very pleased to announce that the Arkansas Supreme Court published its decision recently, and the Chaneys scored a complete win.

Our client was hit by a negligent driver. Farmers Insurance Company hired a well-known defense firm to represent the negligent driver. After about four months, however, Farmers tried to substitute its own in-house, employee-attorney into the case to represent the negligent driver. At that time, Nathan Chaney opposed this substitution on the grounds that it was illegal and unethical.

The Arkansas Supreme Court sided with Nathan’s argument. The Court applied an Arkansas statute that has been on the books for over 50 years. According to the statute, what Farmers was trying to do is the unauthorized practice of law. While Farmers’ lawyer challenged the constitutionality of the statute, it was upheld on appeal. Farmers also claimed that our firm could not raise this issue, but the Court summarily rejected that argument.

The Court’s decision was split 4–3 (our Supreme Court only has 7 justices). The remaining 3 justices would have held the statute unconstitutional because only the Arkansas Supreme Court can govern the practice of law in our state. However, those 3 justices also sided with our argument, since they held in a concurring opinion that “[a]n attorney may not serve two masters” because the attorney’s loyalties would be divided. A lawyer’s client has the right to undivided fidelity from the lawyer, and a corporation cannot provide the required loyalty. However, the Court reserved its strongest language for the divergent interests an insured and his insurance company have:

Further, an insurance carrier, for example, is a business and is naturally concerned with profits and retaining as much of the insurance premiums as possible, which translates in a lawsuit into a desire to pay as little in fees, costs, and judgments as possible. The insured’s interests are not the same as the insurance company’s, and those interests may vary greatly.

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The relation of an attorney to his client is pre-eminently confidential. It demands on the part of the attorney undivided allegiance, a conspicuous degree of faithfulness and disinterestedness, absolute integrity and utter renunciation of every personal advantage conflicting in any way directly or indirectly with the interest of his client.

As we have said in the past, this case is just one example of the way the Chaney Law Firm fights for the rights of individual Arkansans every day. The right to competent and unbiased counsel has been reaffirmed for every Arkansan who has an auto insurance policy, and we are proud to be protecting ordinary Arkansans against the interests of corporate greed.