They are obligated to take care of me, not negotiate something that would require me to admit guilt over something I didn't do or drop me. That's clearly not representing me to the best of their ability, since they can do better. It's still bad faith.
An attorney's job isn't to get you your ideal desired result. It is to represent you to the best of his abilities. If you get your ideal desired result, great! But not getting it is not a sign of bad faith.
And because there is a- presumably- equally motivated and skilled attorney on the other side of the negotiation, odds are high that you will not get everything you want.
If the other side in a discrimination suit gets negotiated down from a monetary settlement to a public apology, etc., you will have a hard time convincing anyone that your attorney acted in bad faith.
Here's the thing: attorneys get to drop clients for all kinds of reasons. In most cases, though, dropping a client in the middle of a case that is actually being argued before a judge requires the judge's approval.
But in a liability coverage policy in which your InsCo is providing you with legal representation, part of the agreement defines when they can drop you without such approval. As it is part of that contract you signed, you will be expected to have read it and agreed to it.
And one such condition is when you decide to proceed to court when the provided attorney has successfully negotiated a settlement.
It's not my fault if the other side refuses to settle. A proper defense doesn't require me to admit guilt for something I didn't do.
The only person you can control is yourself. And not all settlement negotiations end in signed agreements. Agreement requires mutual assent. Where it is absent, assigning "fault" is a difficult task at best.
If the opposed party's strongest demand is a public apology (as described before), you might not be able to find a mutually agreeable settlement. In that case, you have an impasse.
But reaching an impasse is not the result of the efforts of the attorneys representing the parties, it is the result of the decisions of the parties themselves.
In addition, that isn't the definition of "a proper defense." Ideally, no you wouldn't, but we don't live in an ideal world.
A classic example is the nolo contendere plea in criminal cases. Pleading nolo contendere means that you are not pleading guilty, but are admitting that the pattern of facts presented is sufficient to support a conviction. If you go nolo, it is functionally very similar to a guilty plea, and counts as a conviction, but cannot usually be used against you in civil courts.
Which is why you might plead nolo, even if you did nothing wrong.
I'm pretty sure I could find an attorney willing to take my case and sue the insurance company for bad faith. Especially since in California, bad faith cases are attorneys' fees cases. It's not at all reasonable to require the insured to admit guilt for something he didn't do via the threat to withdraw if he doesn't. That's coercive behavior and insurance companies engaging in coercive and abusive behavior to settle a claim is grounds for a bad faith claim. Insurance companies are deathly afraid of bad faith. Just saying those words to them prods them into action like there's no tomorrow.
See above- it is highly unlikely that such a case would proceed, since the conditions to the contract
you signed allows them to do exactly what you're objecting to.
In addition, be careful what you wish for. If you sue an attorney for malpractice, he is permitted by law to use information normally covered by attorney-client privilege to defend himself, if he needs to. If the malpractice claim you are making is that he bargained in bad faith, he will do
exactly that! because that is the only possible way he will be able to prove he did his job properly.
A bit of free advice: if you ever find yourself as a business owner or part of a HR department, you might want to invest a few hundred in taking one or more of the live online business or employment law courses offered by the National Business Institute. I specify "live" because those include Q&A sessions, and you could raise these same issues with an experienced specialist in this field.
http://www.nbi-sems.com
You might not get the answers you want, but you will get the ones you need.