Interpleader/Policy Limits Resolution
Quite often, multiple claimants in a single accident or occurrence warrant the tendering of the full insurance policy limits. Sometimes, this occurs pre-litigation, while others occur during the pendency of litigation, the latter of which prompts defense counsel to file an "Interpleader" petition with the court. The Interpleader petition deposits the insurance proceeds with the court, and thereafter, the court will schedule a hearing to allocate the funds.
In circumstances where one attorney or firm represents several clients in a single action, a "conflict" may arise insofar as to how counsel is to allocate the policy limits to his/her clients. See, Pennsylvania Rules of Professional Conduct Rule 1.7 "Conflict of Interest: Current Clients." That is to say, counsel's attempt to allocate for one client may create an "adverse" relationship relative to another client. In other circumstances, different attorneys and firms may represent separate, numerous clients.
Ultimately, the resolution of all the claims grinds to a standstill. Multiple counsel seeking the maximum share of the proceeds for his/her client may result in disagreement amongst other counsel as to how the proceeds are distributed. Regarding an Interpleader petition, it may take the court weeks or months to schedule, allocate, and dispose of all the claims. The unfortunate result for the Parties, counsel, and insurance carriers is that weeks or months pass until a decision is made.
That being said, I have added another dimension to my practice to resolve these claims.
All Parties and/or insurance carriers simply submit the multiple claims to me for allocation and resolution. It can involve scheduling a hearing, submitting evidence, calling witnesses, or it can involve submitting written memoranda only. In either circumstance, I will review the materials and allocate the funds accordingly. Any conflicts are resolved, the clients are happy, and everyone can close another file.