Malpractice Insurance Report

In the recent California Lawyer’s Annual Professional Liability Insurance Report, the writer quotes the ABA. Their study shows that 44,000 claims were lodged against insured lawyers nationally within the study’s three year period. Of this group, “…(s)olos and smaller firms were sued the most: 70 percent of all insurance claims were brought against lawyers in firms with one to five attorneys.”

I suppose this was the basis for arguing that lawyers either need malpractice insurance or should disclose to their clients that they don’t have such insurance. Yet, if 70% of the legal community works in the small firm environment, wouldn’t it make sense that 70% of the claims would be filed against this goup?

Despite these statistics, there is no study ever cited that shows how many claims, IF ANY, were filed against the approximately 30,000 (20%) attorneys in California who do not carry malpractice insurance. There is no study to conclude they have claims filed against them; there is no study to conclude they have been unable to negotiate settlements with their aggrieved clients, if any; there is no study to conclude these are “bad” or negligent attorneys from whom the public needs protection.

Despite this, the Bar (now about 23 states) has moved forward in lock-step to punish this group of attorneys by increasing their already marginal cost of operation and forcing them to become adversarial with their prospective clients by having this discussion.

Clever lawyers who may seek to avoid the negative consequences of this new rule can take a number of alternative paths to side-step the issue. They can obtain the most minimal policy, the true net effect of which will leave nothing for the client at the end of any malpractice litigation. They can bury the required disclosure language in a long written engagement agreement, seldom read by clients, thus avoiding the necessity of raising the issue with the client. Among other tactics.

As in other instances, the Bar fails to protect its members who pay their salaries and fails to protect the public by availing attorneys with affordable negligence insurance.

Categorized in: Personal Thoughts