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Representatives of the lawyers and insurers have had two, closed-door meetings in a Los Angeles hotel; a third session is planned this week.

The antagonisms between these two lobbies runs deep. During the past decade, they have been involved in California's costliest political fights. In 1988, lawyers and insurers spent a combined $80 million on an array of insurance-related ballot initiatives. Ironically, the only one of those initiatives to win voter approval was Proposition 103 -- which both the insurers and the lawyers opposed.

Since then, they have fought each other at every turn in the Capitol's political wars over such high-profile topics as workers compensation insurance, automobile insurance, bad-faith lawsuits and construction- defect coverage, among other issues, that have an immediate effect on Californians' pocketbooks.

The latest dispute, and the trigger for the secret negotiations, is over a legal doctrine known as "Royal Globe," which allows the filing of so-called third-party, bad-faith lawsuits against deep-pocket insurers. In effect, insurers say "Royal Globe" allows third-party suits -- such as those by contingency-fee based attorneys -- to be filed unfairly at the drop of a hat, driving up the costs of coverage and clogging the already-crowded civil courts.

The multimillion-dollar issue, while arcane and obscure, is of critical importance to lawyers and insurers. Royal Globe was repealed years ago, but trial lawyers are pushing legislation to renew the doctrine, and that threatened reinstatement is at the core of the new negotiations.

In addition, a new dispute is erupting over low-cost automobile insurance, a hot-ticket issue for both sides. Insurers long for some form of no-fault coverage, in which a driver's company pays for damages in an accident regardless of who's to blame. It allows insurers to settle claimants' disputes without going to court, which means, of course, fewer legal fees. The proposal, in various forms, has been offered a dozen times in the past decade, and it has always been defeated in the Legislature, or at the ballot box, amid opposition from lawyers.

Insurers reportedly are crafting a new low-cost auto plan that they hope will win the lawyers' support. Details of their proposal have not been released, but if it entails no-fault it is all but certain to be rejected by the lawyers, who contend no-fault unfairly limits a driver's ability to collect legitimate damages in court.

Capitol insiders say this week's meeting is likely to prove critical. If the negotiations fail, a flurry of special interest bills from both sides is all but certain to be introduced as soon as lawmakers get back to work in January.