Reinsurers Cannot Recover Fees From Cedent’s Former Counsel, Utah Judge Rules

SALT LAKE CITY — Two reinsurers cannot recoup attorney’s fees paid by their cedent in an underlying coverage action because the coverage dispute was not the foreseeable consequence of the law firm’s alleged malpractice, a Utah federal judge has ruled.

On Jan. 18, Judge Ted Stewart of the U.S. District Court for the District of Utah found no reasonable jury could return a verdict for National Indemnity Co. and Certain Underwriters at Lloyd’s London on their claim for attorney’s fees under the third-party litigation exception.

United States Sports Specialty Association was named as a defendant in a suit brought on …