Friday, December 1, 2006
Posted by Alan Childress
The legal profession's watchdog group HALT offers this memorandum on the current status of a state bar ethics requirement it endorses: mandatory and public disclosure of whether the attorney maintains insurance coverage for malpractice liability. So far only Illinois has accepted HALT's suggestion in full, including ready public access to the status of such coverage, to be linked here. A handful of other states, including Kansas, Virginia, and North Carolina, have some form of mandatory reporting with some public access to the information, while four (Alaska, N.H., Ohio, S.D.) require disclosure to a client directly. HALT has elsewhere urged California to improve in this area, and more generally urges states to sponsor or endorse insurance so as to keep rates lower and induce more lawyers to buy in. (HALT has its offices on K Street in D.C.--home of the Abramoff-ish world of lobbying and influence--but hardly seems a part of the worst aspects of those circles.)
It used to be that the prevalence and extent of malpractice claims and awards was the "profession's dirty little secret," as described by Manuel R. Ramos in his important 1994 article (47 Vand. L. Rev. 1657). By digging through actual insurance company records, Ramos exposed the reality that real claims happen much more frequently and with money amounts in excess of what lawyers, professors, and writers had long assumed. Now groups like HALT are trying to make sure that actual non-coverage, essentially exposing clients to the potential for uncompensated malpractice, will not remain a secret either.
UPDATE: For Pennsylvania's new disclosure requirement, in its rule 1.4(c), go here. For the ABA's helpful updating chart on the state-by-state status of such requirements or proposals, link here. Its model court rule on the subject, and a cite to an article criticizing such disclosure and analyzing the ABA proposal, is here.