WHEN SHOULD COUNSEL BE DISQUALIFIED BECAUSE THEY MAY TESTIFY AT TRIAL?
Bad faith claims frequently are based, at least in part, upon the communications between, or the conduct of, attorneys representing an insurer and/or insured. As a result, it is not uncommon in bad faith litigation for one or both sides to threaten, or at least consider, seeking disqualification of opposing counsel. But when is disqualification really appropriate? The Washington Court of Appeals (Division II) addressed this issue recently American States Insurance Company v. Nammathao (December 10, 2009) (.pdf) -- a dispute over UIM coverage.
Nammathao highlights that, while parties often may be tempted to seek disqualification, it is usually a measure of last resort. Reversing the trial court's disqualification of the insured's counsel, the Court of Appeals held that the trial court had not made the required findings. Where an opposing party intends to call an attorney at trial, disqualification is warranted only if the trial court makes each of the following three findings:
- The attorney will give evidence material to the determination of the issues being litigated;
- The evidence is unobtainable elsewhere; and
- The testimony is or may be prejudicial to the testifying attorney's client.
The Nammathao court also indicated that the standard for disqualification is lower where a party intends to call its own attorney at trial. But the trial court must still make specific findings regarding the importance of the anticipated testimony and whether disqualifying the attorney would be a hardship for the client.
