Show and Tell
ABA Urges States to Require Lawyers to Disclose Malpractice Insurance Coverage
Posted Oct 23, 2004 8:18 AM CDT
By James Podgers
Twice before in the past two years, the committee has floated proposals to either require or encourage lawyers to carry professional liability insurance. Both ideas failed to attract enough support to merit bringing them to the ABA’s policy-making House of Delegates for a vote.
In August, however, the Client Protection Committee and several co-sponsors succeeded in gaining approval from the House for a model court rule that, if adopted by states, would require lawyers to report on their annual registration statements whether they carry malpractice insurance.
But even that measure--a scaled-back version of the committee’s earlier proposals--barely passed the House of Delegates.
The final vote approving the measure was 213-202, and it followed a sharp debate in which opponents argued that a disclosure requirement would mislead clients if they do not receive additional information about the status of a lawyer’s insurance, such as coverage limits, whether coverage is claims-made and exceptions to coverage. “This is a well-meaning but ineffective way to provide client protection,” said Dianne K. Dailey of Portland, Ore., who is a delegate representing the Tort Trial and Insurance Practice Section.
Even the measure’s proponents acknowledged that requiring lawyers to disclose whether they have liability insurance doesn’t necessarily give clients more security than they already have.
“But at a minimum, this disclosure provides some basic protection for clients,” said Robert D. Welden of Seattle, who chairs the Client Protection Committee. “Don’t put off taking a practical action in search of a quixotic, perfect one.”
Only Oregon requires lawyers to carry professional liability insurance in order to practice. Four states--Alaska, New Hampshire, Ohio and South Dakota--require lawyers to disclose directly to clients whether they carry insurance, according to the Client Protection Committee’s report.
Except for Oregon, said Welden, “I don’t think there’s any movement anywhere in the country for mandatory insurance, and I don’t envision us initiating that.”