Calif. State Bar Considers Malpractice Insurance Disclosure

July 23, 2007

The California State Bar is considering whether lawyers in the state should be required to disclose whether they have malpractice insurance.

State Bar President John Van de Kamp has appointed a task force to study whether the state should require California lawyers to disclose if they maintain professional liability insurance, and if so, how such a requirement should be accomplished.

The 15-member Insurance Disclosure Task Force, chaired by James E. Towery, bar president in 1995-96 and former chair of the American Bar Association Standing Committee on Client Protection, will report to the state Supreme Court and the bar’s board of governors. If the panel determines disclosure is necessary, it is charged with coming up with a plan to implement the requirement.

“The ABA has passed a Model Rule calling for disclosure and requested all states to consider this issue. Independently, it’s time for the California State Bar to address this as a client protection issue,” said State Bar President John Van de Kamp. “In our discipline system, we see too many respondent lawyers who fail to carry insurance. As a result, clients turn to the State Bar’s Client Security Fund, which all of our members pay for as part of our bar dues.”

The ABA passed the Model Court Rule on Insurance Disclosure last August, and similar requirements for lawyers have been adopted by 12 states. The ABA Model Rule requires lawyers to certify to the highest court of the state whether they are currently covered by professional liability insurance and state their intention to maintain insurance during the time they are engaged in the practice of law. Lawyers employed by government or as in-house counsel are exempt. Lawyers must give written notice to the court in the event that the insurance policy lapses.

Under the ABA Model Rule, information in the certified disclosures is public and made available in a manner prescribed by the court. Failure to comply with the certification requirement results in administrative suspension from the practice of law, and false information subjects a lawyer to discipline.

Until five years ago, state laws required California attorneys without professional liability insurance to disclose that fact in their written attorney fee contracts with clients. Those statutes expired in 2000 because of “sunset” provisions in the legislation.

Appointees to the task force include lawyers from different segments of the bar, as well as representatives from the Legislature, the Supreme Court and consumer groups. The 15 members are:

James E. Towery, Hoge, Fenton, Jones & Appel, San Jose (Chair)
Mary Alexander, Mary Alexander & Associates, San Francisco
Chris Bjorklund, San Francisco
Kevin DeSantis, Butz, Dunn, DeSantis & Bingham, San Diego
Beth Jay, California Supreme Court, San Francisco
Drew Liebert, Assembly Judiciary Committee, Sacramento
Maralee MacDonald, Boutin Dentino Gibson Di Giusto Hodell Inc., Sacramento
Edith Matthai, Robie & Matthai, Los Angeles
Steven Mehta, Mehta & Mann, Valencia
Frank Pitre, Cotchett, Pietre, Simon & McCarthy, Burlingame
Russell Roeca, Roeca, Haas & Hager, San Francisco
Terrie Robinson, Sacramento
Francis S. Ryu, Law Offices of Francis S. Ryu, Los Angeles
Gene Wong, Senate Judiciary Committee, Sacramento
Dean Zipser, Morrison & Foerster LLP, Irvine.

Source: State Bar

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