Insurance companies can pursue malpractice claims against law firms they hire to represent policyholders when they have a subrogation agreement with those policyholders, according to the Florida Supreme Court.

The court on June 3 overturned a ruling from the Fourth District Court of Appeal that had upheld a trial court ruling dismissing an insurance company’s malpractice claim on the grounds that while the law firm and policyholder had privity, the insurance company and law firm did not.

The Supreme Court agreed with the reasoning on privity, but said that failed to take into account that the contract with the policyholder included subrogation for the insurance company, which meant it had an interest in the law firm’s actions.