“There can be no dispute that a ‘consent to settle’ clause in a professional liability insurance policy may impede settlement. As one court acknowledged, these clauses will inevitably have the effect of sapping party resources and unduly consuming judicial time and resources,” write Jonathan L. Schwartz and Seth L. Laver, attorneys in Goldberg Segalla’s Global Insurance Services and Professional Liability Practice Groups.
In this article, Jonathan and Seth note that “Insurer-insured disputes focusing on consent to settle clauses typically involve savvy and informed professionals who are keenly aware of the impact that an acknowledgement of liability would have on their reputations. Sometimes, however, insurers become embroiled in quagmires involving an absent insured who cannot consent to a settlement.”
“The requirement for the policyholder to consent to a settlement remains, though. That requirement presents difficult challenges for insurers and defense counsel alike, potentially thwarting any attempt to settle the insured’s civil liability on a favorable basis.”