The term “Tilley counsel” is used to describe a lawyer appointed by an insurance company to represent the insured under a liability insurance policy. It comes from the 1973 Texas Supreme Court case Employers Casualty Co. v. Tilley.
Through use of the “eroding” limits policy, the property and casualty industry has put Tilley counsel in direct competition for the dollars available to pay claims brought against insured clients. Stated differently, money available for claims release is spent on claims handling. This can become problematic for counsel’s compliance with the fiduciary duties arising from an attorney-client relationship. Noncompliance can, in turn, put an attorney’s financial assets at risk.
