STORY FROM: Reinsurance & Arbitration

Reinsurers Must Bring Legal Malpractice Action in Own Names, Ill. Appellate Court Affirms

CHICAGO — An Illinois appellate court has upheld dismissal of a surety’s attorney malpractice complaint, explaining that because the surety’s reinsurers paid any damages the surety suffered as a result of the alleged malpractice, the reinsurers, as the real parties in interest, should have filed the action in their own names.

In a June 30 opinion, the Illinois Court of Appeals, 1st District, affirmed that under state law, “the interest of a subrogee cannot be concealed in any proceeding brought for its benefit” and “must be either named as the plaintiff or disclosed as the real party in interest.”

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