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Cumis counsel

The 1984 California Court of Appeals decision in San Diego Fed. Credit Union v. Cumis Ins. Soc'y, Inc., 162 Cal. App. 3d 358, 208 Cal. Rptr. 494 (Cal. App. 4th Dist. 1984), held that where an insurer is defending under a reservation of rights, a conflict of interest exists between the economic and litigation interest of the insurer and the insured. Under these circumstances, the traditional right of the insurer to select counsel and control the defense effort is lost. As a result, the insured selects counsel and controls the defense, but the insurer must pay the defense costs. Such counsel, selected and controlled by the insured at the expense of the insurer, is known as Cumis counsel.


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