Mandatory Insurance Disclosure Resource Page

 


 


This issue was prompted by a letter (with attachments) sent by Austin lawyer, Charles Herring (a member of the original task force), to the Supreme Court in 2007. A scan of these comments as published by the State Bar Board of Directors can be downloaded here.

The background of the proposed rule is this: In 2004 the ABA adopted a "model rule" requiring a lawyer to disclose whether he or she carries professional liability insurance. Here is the comment from the ABA website:

On August 10, 2004, the American Bar Association House of Delegates adopted as ABA policy the Model Court Rule on Insurance Disclosure. The Model Court Rule requires lawyers to disclose on their annual registration statements whether they maintain professional liability insurance. It places an affirmative duty upon lawyers to notify the highest court whenever the insurance policy covering the lawyer's conduct lapses or is terminated. This ensures that the information reported to the highest court is accurate during the entire reporting period. Lawyers who do not comply with the Model Court Rule are not unauthorized to practice law until they comply....
 
The information submitted by lawyers will be made available by such means as designated by the highest court in the jurisdiction. For example, in Illinois, Kansas, Nebraska and Virginia, information regarding a lawyer's professional liability insurance is made available to a potential client if the client telephones the bar association and requests it. The information can also be accessed on the bars' websites....To date, twelve jurisdictions have addressed the issue of reporting the maintenance of professional liability insurance.

The rationalization for this rule is "to provide a potential client with access to relevant information related to a lawyer's representation in order to make an informed decision," but its obvious effect is anticompetitive and enhanced vulnerability of lawyers to claims and suits.

The Task Force of 2007-2008 recommended against the adoption of any such rule. However, earlier this year, the Supreme Court's "Grievance Oversight Committee" submitted a report, which among other things, made the opposite recommendation. Justice Jefferson asked the Bar Board to review the matter due to the Board's failure to take a stand on the issue. That letter is here. Roland Johnson's response is here.

An excerpt of the GOC's recommendation is here. Note the superficial way it treats opposing points of view (which it refers to as "talking points") and the record keeping requirements it places on lawyers for a number of years.

The Council of this Section has taken a decisive stand against this issue which you can read here.

 


 


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