Allocation of Defence Costs and Conduct of Defence

By Admin // In Articles // 2018.06.27 // Read More

Scott W.K. Urquhart and Nikta Shirazian

I. Introduction

In most instances where a duty to defend has been triggered the insurer has the obligation to pay the defence costs and will have conduct of the defence. However, this arrangement is not true in all cases. Indeed, certain circumstances arise where the costs of defending an action can be allocated amongst various parties. For example, such a scenario may arise when an insured has more than one liability insurer and both are obligated to defend an action. It may also arise in instances where there are covered and uncovered aspects to a particular claim. The purpose of this paper is to provide an overview of the legal principles governing the allocation of defence costs in the aforementioned scenarios. This paper will also address the legal principles governing the determination of which party obtains conduct of the defence in such circumstances.