Insurance carriers and their counsel should strongly consider intervening in underlying litigations involving their insureds in order to assist in the resolution of insurance coverage issues. Strategic intervention is an advantageous, but underutilized, litigation device that might enable counsel to forestall months or even years of delay in resolving coverage disputes between policyholders and insurers. By intervening for limited purposes, counsel can seek to submit declarations, special interrogatories or verdict forms, as well as participate in proceedings and hearings that will ultimately determine what evidence will be presented to the trier of fact.
Although federal and state courts do not allow insurers to intervene in all scenarios and without limitations, if utilized appropriately, strategic intervention can result in differentiated verdicts that will assist courts in allocating liability in any subsequent coverage litigation. Many courts look favorably upon strategic intervention, reasoning that an insurer’s limited involvement generally results in judicial economy by preventing inconsistent verdicts and reducing litigation costs.
