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Forcing attorneys to reveal their PLI would invite lawsuits. Clients are already at liberty to inquire of a prospective attorney regarding their PLI or lack thereof.

I think it is a bad idea. All attorneys have clients who are never satisfied even when they have reached a good settlement to their case. Mentioning liability insurance to this sort of client will only encourage malpractice suits for them to see what else they can get.

This proposal is another attempt by large firms to gain an advantage over small firms and solo practice members.

First, I do not and have not carried malpractice insurance for decades. It was too expensive and would have put me out of business. If I have to carry malpractice insurance to not be disadvantaged by large firms, I'll have to raise my rates to the level of attorneys in large firms. That will put me at a disadvantage and cause more clients to not be able to afford legal services. Large firms want this. Then, only their large clients, which can afford higher rates, will be able to pay for legal services.

Second, I don't need malpractice insurance. I don't work on matters that are likely to involve a malpractice claim, such as securities offerings.

The only claim I ever had filed against me was by a non-client, the Federal Government, whose case was so weak, it was dismissed on summary judgment.

I believe that if I had not had malpractice insurance, the Federal Government would not even have file suit. Malpractice insurance breeds claims.

Third, I've never had a client even ask me whether I have malpractice insurance or sue me for malpractice.

Forth, if a client wants to know whether an attorney has malpractice insurance, it can ask. We don't need a confessional statement raising an issue that is covered by the free market.

If we are going to have to state differences between large firms we may as well add whether we make large political contributions to judges, or maintain firm retreats to entertain clients.

This is a bad idea.

Being forced to let the clients know that we have a deep pocket if they want to get some money "without hurting anyone but the insurance company" will also make grievances in support of the malpractice case more prevalent. I resented it when we were forced to notify each client of how to file a grievance against us, just like the beauticians. I felt that was a blow against our being professionals and this proposal would be a further onslaught.

This is a TERRIBLE idea! I'm in a small firm and I DO have malpractice coverage. However, to advertise that coverage to clients is to invite the clients to file a claim. In 30 years of practice, I've never had a claim, but I've had some dissatisfied clients. - Even when their cases were successful! That's the nature of an advesarial process. Requiring up-front disclosure of malpractice insurance is stupid. The only ones who would benefit from it are the insurance agents and the big firms.

I too believe this is a very bad idea. I think we are getting too political and reactionary. I carry PLI and always plan to. However, I do not believe that the insurance industry should be able to make this mandatory, which is where this is headed. If someone decides they do not need to carry it, then they should not have to. I think that is a bad idea, but we are way too paternalistic already. This will encourage baseless and unnecessary lawsuits and will be bad for the profession.

The Supreme Court should follow the Task Force recommendation and not implement any rule about malpractice insurance disclosure.

Surely the INSURANCE LOBBY has nothing to do with this reform effort? The Texas Bar already makes a lot of money off of us in exchange for so little, and it's always looking to make more. Follow the money...

Requiring such disclosure protects no one. Stop telling me how to run my firm.

I agree with the vast majority of comments that this is not a good idea. A client is able to inquire and determine if the lack of insurance is a reason not to hire an attorney. Like all the other background inquiries they may make to help determine whether to hire an attorney, this is only one. Why stop here? Why not disclose all past claims and disciplinary actions? That, to me, would be more relevant that the presence/lack of insurance. Why not disclose how many similar cases to the clients the attorney has handled? They may not have handled many, and shouldn't the client know that as well. It's a slippery slope that there is no need to proceed down.

It seems as though virtually every comment on the proposal was that the proposal was a bad idea. Add me to the list. Why would ANYONE want to put more money into the coffers of an insurance company, and we all know just how carriers react to any sort of a claim...stall, delay, deny.

I've been out there 30+ years w/o a single complaint. I carried insurance for a couple of years, but the cost/benefit ratio was not in my favor and I re-evaluated the decision to carry insurance.

This is just an additional burden placed on many of us who are working to help those in need of legal representation. Not just sometimes, but all the time. For the insurance disclosure to be mandatory for attorneys while not mandatory for other professions is unequal treatment and discrimatory on its face. I am for having malpractice insurance, NOT for mandotorily disclosing whether we have it.

The "feelgood" argument that its good for the consumer is a red herring. Is it really good for the consumer though? What we do lends itself to conflict because its based on conflict. We argue our client's perspective in a manner that hopefully results in a positive outcome for them. Sometimes this doesn't happen. Not because of what we do or don't do, but because of the facts of the case. Some of our clients may not be happy with a jury verdict, an arbitrators decision, or if a conflict results, if an attorney has to withdraw.

When medical patients are signing away their rights through disclosures and waivers and arbitration agreements, do doctors also include a paragraph that says "oh yeah and by the way, in case don't turn out the way you like, I carry malpractice insurance?" No..and why not, because its an open invitation for litigation.

For those who do carry insurance, they would be more likely to be sued. For those who don't, their practice may suffer in numbers. Either way, there is no clear benefit to the consumer, lawyers would be less likely to take cases and could result in many attorneys or firms less willing to accept probono opportunities, why risk it right? The only party to benefit out this whole thing is...you guessed it, the INSURANCE COMPANIES!!

I agree that this is a bad idea, and adopt by reference as if fully set out herein all of the reasons stated above as to why it is a bad idea.

I don't think anyone should ever have to announce their insurance coverage or lack thereof. Not even auto drivers have to publicly do that.

We just assume that a new Mercedes is insured and an old banger isn't.

I thought the issue was to disclose or not to disclose (lawyers malpractice insuranace coverage) - not whether malpractice insurance should be mandatory. There is a difference. Do Texas drivers have to publish on a public site their insurance coverage? I do not think so but I may be wrong.

I feel strongly that lawyers should not be required to carry malpractice insurance and should not be required to notify clients or potential clients about coverage or lack thereof. For those with coverage, its disclosure invites the mindset that there is a deep pocket available to redress grievances (real or imagined). For those without insurance, being forced to disclose that fact implies to the consumer that the attorney or his services are somehow inferior. I do believe that requiring the disclosure of attorney discipline is an important factor that potential clients shoud be made aware of.

An outrageous idea.

Lets see if any of us can remember the last Doctor or Hospital which disclosed their malpractice coverage to me, or the Nursing Home that we put our parents into, or my CPA, or my Home Builder or General Contractor.

It is the Small Practitioners who take the brunt of these consumer driven initiatives.

Like others, I carry malpractice insurance but do not believe that the State Bar of Texas should be involved with my business. They should regulate ethics, not business, and this is not an ethics issue.

I too believe that this is an outrageous idea. It is not fair to the solo practioner and small firms.

Why is it always lawyers who get picked on with these inane ideas? What about the doctors? If it's a good idea for lawyers the same should certainly be true for our brothers in other professions. Let's make every doctor, chiropracter, nurse, hospital, insurance broker, plumber, accountant, etc. hang their policies on the wall (or for nurses) wear them on a badge.
Doesn't the Supreme Court have better things to do than harass us?

Bad idea

Good thinking! why would any atorney do pro bono work when it could cost them. Does Texas have a problem with attorneys getting sued and no assets are available to satisfy the damages? If you have to disclose, do you have to also state your policy limits carried or just that you have "insurance".

Why should we have to disclose whether we carry something we are not even required to have?

This is a solution to a problem that doesn't exist – the brainchild of one Austin lawyer whose practice consists mainly of suing his colleagues who carry professional liability insurance for legal malpractice.

The whole process has been rigged – an unrepresentative "task force" composed of the aforementioned Austin lawyer, chaired by a big-firm lawyer who stated his bias for disclosure before the task force even met, and a balance of big-firm and boutique lawyers – no solos or small firm lawyers until an outcry was raised, and then only two, even though solo and small-firm lawyers make up nearly 70% of the Bar.

Then there is the Supreme Court's Grievance Oversight Committee, which also recommended disclosure as a disciplinary rule requirement, a committee that included eight lawyers, only two of whom would be subject to the rule – the other six being government lawyers, law professors, or a member of a captive insurance defense law firm.

And speaking of government lawyers, they would not be affected by a disclosure rule – only private practitioners. Private practitioners already carry the ball on the occupation tax and the legal services fee. We don't need another rule that adverse affects just one portion of the membership.

This is a bad idea, and it should not be imposed on the lawyers of Texas unless it is approved in a referendum of those lawyers.

This is a very bad idea. Are doctors required to disclose whether or not they have liability insurance? I strongly urge the SBOT Board of Directors to NOT SUPPORT this proposed policy.

First: Require minimum limits as a predicate for keeping a license in good standing. Lawyers are the only insulated class of fiduciary NOT required to bond their fidelity.

Second: Allow disclosure of excess coverage for those who are proud of shouldering their responsibility.

I think it is a terrible idea. I am strongly opposed.

Bad idea!

Reminds me of the board certification disclosure - let's see if we can't make some other lawyer demean him/herself in public.

I'm not board certified - [the public hears - I'm not as good as someone who is certified]

I don't have e&o coverage - [the public hears - I'm not as good as someone who has coverage]

This is not a good idea.

I carry malpractice insurance due to the nature of most of my practice. That said, this is another bad idea from the State Bar and Supreme Court for all or most of the reasons stated above. There is always a bad apple in any barrel of apples, and posting insurance information is only begging for claims by the bad apple.

I am against disclosure. I believe that it invites litigation and does not tell a client whether an attorney is competent or capable of handling a particular matter. There are a lot of solo attorneys practicing in Texas and the costs of malpractice insurance is usually very high. It punishes the wrong people.

I think this is silly and insulting. I've never had a person I contacted for services have to disclose the insurance they carry to me; why should I have to disclose it to my potential clients? On the other hand, whenever I have asked vendors whether they had insurance or for proof of insurance, they have been happy to comply, just as I would comply with a potential client's request.

I suspect most attorneys already provide way more information about themselves to their clients than most other businesses do. Why are we singled out for this crazy requirement?

Disclosure should not be required.

Keith

I, too, oppose disclosure. The main reasons have already been stated quite well, and I hope the sheer volume of protesting attorneys helps derail this terrible idea.

Our firm has coverage. We are strongly opposed to disclosure requirements.

This is a bad idea that if implemented will, I believe, frustrate goals the State Bar and the Texas Supreme Court strive to achieve, From a purely economic perspective this will have the effect of increasing the cost to conduct business which will force some folks out of the profession. In turn, there will be less time and less funding available to serve the public through various pro bono efforts.

Mandatory public disclosure of insurance coverage will harm the reputation of perfectly competent attorneys who have made the business decision not to carry insurance. That decision is generally made on the basis of economics. I know from the attorneys I've seen face that issue that it is difficult and humbling and always comes down to cutting costs simply to keep the door open.

Small and solo practices are already struggling to get and keep clients in this troubled economy. This kind of disclosure will amount to the licensing agency deliberately torpedoing a portion of its membership. Potential clients are going to read the worst into a mandated disclosure that an attorney does not carry PLI. (In this economy, it could just as easily mean that the attorney had to make the choice between PLI and health insurance.) This disclosure is going to scare off business for the smaller practitioner. Many potential clients are going to assume that the attorney is incompetent or unethical or otherwise deficient, and many potential clients will rule out such an attorney without meeting him/her in person and making a personal determination of competence.

Requiring this kind of disclosure would not merely be an intrusion of government into attorney's personal business relationship with clients, it would be an active, deliberate and in many cases devastating interference in it.

I carry PLI. However, with the exception of a few insurance carriers who I sometimes provide defense services for their insureds, I have NEVER had a client ask me if I had a PLI policy, PLI coverage or any insurance at all. I have performed legal services from admiralty to workers compensation. Clients do not hire you because you may or may not have insurance. It is not material to their decision making process. They hire you because they have an issue that needs to be taken care of and they want you to be the one to do it. Whether they hire you by reputaion, skill or pulling your name out of the telephone book, PLI is not on their mind.

This is a bad idea. I do not know whether it will promote litigation for malpractice, but it will surely make it easier for the attorney who is asked to sue another attorney to go to a web site and make his decision, not on whether there is a valid and justifiable claim, but on whether there is an insureance carrier who can be "pushed for business reasons" to give up the defense of an attorney and coerced into a settlement.

It has always amazed me that the State Bar works to the detriment of its members. Now they want us to encourage people to sue us.

I am vehemently opposed to the idea for all of the various reasons previously stated.

I am opposed to mandatory insurance disclosure. I believe requiring disclosure will only invite litigation.

OPPOSED. I can think of may reasons why this is a very bad idea, and can see from the posts that many others can as well. I cannot, however, think of one logical, sound reason why this is a good idea. However, it appears that a few people out there do think that it is a good idea to bet against themselves and let the insurance company skip happily away with the premium.

Does anyone enjoy seeing that billboard on I-10 that says, "We Sue Lawyers"?

Disclosing that you have PLI will invite more lawsuits against attorneys.

Lawyers that sue other lawyers first want to know whether an attorney that allegedly committed malpractice carries PLI. If she does not have PLI, the plaintiff is less likely to pursue a lawsuit.

Do we really want to see more billboards and advertisements encouraging suits against attorneys?

The Mission Statement of State Bar of Texas is: "... to support the administration of the legal system, assure all citizens equal access to justice, foster high standards of ethical conduct for lawyers, enable its members to better serve their clients and the public, educate the public about the rule of law and promote diversity in the administration of justice and the practice of law."

Does the Professional Liability Insurance Disclosure Proposal help meet this mission? I think not.

In addition to limiting lawsuit abuse, we are trying to protect the integrity and reputation of the Bar.

After reading all of the materials on the State Bar website on each side of this debate, I am struck by the lack of stated purpose for the proposal. Is it in the best interests of the Bar for the proposed disclosure to be made? Is it in the best interests of the public? Is it in the best interests of the insurers?

Many members of the Bar will argue that the proposed disclosure requirements
are simply a thinly-veiled Bar-mandated requirement that they obtain insurance if they are uncovered and that maintaining insurance merely makes them a target for a legal malpractice complaint. This argument is not without merit.

Having engaged in the somewhat unique practice of suing attorneys for negligence and breach of fiduciary duty on behalf of clients, I have found that, in most cases of actionable attorney malpractice, the offending attorney(s) have insurance. However, in many instances (typically an aggrieved client in a family law or criminal law situation) the attorney(s) is/are uninsured. I always disclose to my legal malpractice client (and include a provision in my contract) that if the target attorney(s) are discovered to have no insurance, I will cease representation and withdraw. Most attorneys whom I know that practice in this area have a similar policy. As a result of this policy, from the standpoint of a Plaintiff's lawyer in the malpractice area, litigation that would have otherwise commenced has not. I do not offer an opinion on whether this is a good or bad result (I see both sides), I merely report it as fact.

I tend to be persuaded by the argument that the duty already exists to make disclosure to a client if an attorney is asked about coverage. The Grievance Committee's argument that most clients don't ask is not compelling to me. I often have clients ask, especially business clients and corporations which routinely require not only disclosure but proof of minimal amounts of coverage as a precondition to hiring this firm. Further, the Bar is adequately equipped to inform the public of its right to inquire and is equipped to impose sanctions for any attorney or law firms' failure to make proper disclosure, upon inquiry. This seems a less draconian way of insuring disclosure to any potential client of the existence, vel-non, of insurance, while not making obtaining coverage "mandatory" for the not insignificant number of attorneys and small firms who are ill-equipped to obtain affordable coverage.

The creation of a pool of coverage for otherwise uncovered attorneys smacks of the same type of governmental interference in the operation of private business as is the controversial issue of universal health care now being considered in the Congress. While no one questions the benefits sought to be achieved by covering everyone, the practical application of any such program tends to operate to the detriment of more interested parties than those whom it benefits. Nether the Bar nor the Court needs to be in the insurance business and/or the insurance oversight business. This state and this profession does not need another layer of bureaucracy and oversight on yet another aspect of an attorneys' practice. The requirement for mandatory coverage (and that is, practically, what is being touted here) is another unnecessary burden on the small practitioner. If disclosure is universally and routinely required, then the small practitioner or one who simply cannot afford or otherwise obtain insurance coverage is at a competitive disadvantage to those who can afford it and can obtain it.

While speaking of "universal coverage", what about the attorney that simply cannot obtain coverage? If "disclosure" is required, Is there to be a concomitant requirement imposed upon the insurers that they must cover any attorney, regardless of claim history and/or grievance history, at some affordable cost? How does the Bar propose to either make or enforce such a requirement, if there is to be one? As said, any lawyer who cannot obtain affordable coverage is at a competitive disadvantage to those who can.

While laudatory in purpose from a public relations standpoint, the entire plan has far-reaching consequences that should be carefully considered before making a decision. If a disclosure requirement is inevitable (and that seems the way the wind is blowing) then compromises such as exemptions for solos and firms of less than five members or some other such thing should be considered. Nonetheless, as a general rule, I am opposed to the proposed disclosure requirements, at least in their present form.

Robert John Myers
Attorney at Law
6777 Camp Bowie Blvd
Suite 215
Fort Worth, Texas 76116
817.877.1969
817.877.9969 fax
512.663.2523 cell

We never have an inquiry about malpractice insurance from a client. The inquiry always comes from the defense lawyer after we have sued the ex-client for unpaid attorney fees. They usually file a garbage counterclaim and with the transmittal letter ask us to notify our carrier. We don't have malpractice insurance and never have.

The decision was clear to us when we hired someone who did have malpractice coverage and who brought a case with them. The attorney was sued for a garbage reason. His co-counsel from another firm did not have coverage. Co-counsel was let off the hook after Plaintiff's counsel found out he had no coverage. The insurance company that still covered the hired attorney for work done prior to his hire with our firm settled the case by paying a substantial sum. So we see the fact of not having malpractice insurance to be a deterrent to bogus claims.

Frankly I have no problem disclosing that we have no insurance. In fact I do that anyway in the initial consultation and I tell them why. We will not buy insurance because of our practice of pursuing unpaid fees and we don't want some insurance company telling us not to be suing ex-clients.

Still I am opposed to the mandatory disclosure requirements. Whether someone has insurance should not be a business reason for hiring an attorney unless the client is contemplating suing the attorney before he does any work. Or unless the client is planning on running up a big accounts receivable knowing the attorney will not sue him/her because he/she will risk losing coverage.

Will the next mandatory disclosure be the assets and liabilities of the entity we do business under? Will we have to disclose who owns our car, house, whether we have any funds in savings accounts that would not be exempt from execution? This all seems to be post-judgment discovery at the onset of the attorney/client relationship.

This is obviously a very hot topic and worthy of thoughtful dialogue and consideration. Many have very strong opinions on this issue. Thank you for raising it and for all of the terrific comments on your post.

As an independent insurance broker that specializes in legal malpractice insurance for attorneys and law firms, please understand I hear you loud and clear and have no position on whether this matter should pass or not.

On the other hand, based on the comments above it does appear that the debate should widen somewhat and that additional information is necessary. Here are several thoughts/comments:

(1) Texas is not the first to consider this issue - is there any relevant experience of legal professionals in other states that have enacted similar disclosure rules? On August 26, 2009, the Supreme Court of California entered an order adopting Rule 3-410 requiring lawyers without professional liability insurance to provide written disclosure of their lack of coverage to all new clients and returning clients. Unfortunately, this rule does not go into effect until January 1, 2010. So California is not a guide yet.

(2) Cost - there are many options for legal malpractice insurance coverage and I strongly consider all legal professionals to at least make enquiries annually before electing to go uninsured to properly evaluate the cost and benefit of coverage vs. no coverage.

(3) Lack of Insurance as a risk management technique - some in the posts above suggest that not having insurance is a deterrent to litigation. Is this really wise counsel? Is it advice you would give to one of your clients?

(4) Public Policy - regretfully, mistakes do happen and insurance is the means many use to protect themselves from loss but also to be financially responsible for the losses others suffer. If we were to take some of the posts above at face value, then should we also be advocating the repeal minimum auto insurance requirements across the country?

(5) The Behavior of Others - just because some individuals and businesses do not have one type of insurance or another is no reason why other businesses and even professionals should not have coverage.

Finally, if it appears that Texas will adopt such a disclosure rule and I do not know that they are, would it not be better to concentrate on the details of those requirements instead of fighting to the bitter end?

(1) Content of Disclosure - you should be carefully considering the form, content and intended message of your disclosure form and work to be sure that any new rules would allow you flexibility in these areas.

(2) Change In Insurance Circumstances - The California rule has several provisions that could be more clear:

- notice must be given within (30) days coverage is not-renewed, cancelled, or is otherwise lost

- notice is not required for legal services rendered in an emergency

- notice is not required if the legal representation of the client will not exceed four hours

Law firms that purchase insurance may actually have a more difficult time than the uninsured if: (1) a lawyer has a catastrophic claim that exhausts their policy limits during their policy year, (2) a lawyer cannot obtain insurance at their normal policy anniversary date, (3) a lawyer elects not to renew their insurance due to cost or other changes at their practice, (4) a brief engagement or emergency engagement expands to an engagement exceeding four hours. These real possibilities could lead to some unexpected notice requirements and tricky record keeping and should be carefully considered.

This is a terrible idea which will create more problems than it solves. In over thirty years of practice I have never even been sued by a client. Lawyers mainly don't have insurance because of the cost. The cost has to be passed on to the client. While this is not a problem with high dollar cases or wealthy clients,it will make make it more difficult for others to afford a lawyer which will in turn require even more pro bono representation. It will also encourage litigation and create an additional burden for small firm and solo practitioners.

Attorneys practing as in-house counsel should be exempt from disclosing to the Bar and, coorespondingly, the public whether they maintain professional liability insurance. The insurance protects only the client, and given that most professional liability insurance for in-house counsel is as a rider to the company's directors and officers liability insurance policy, the attorney's only client, the company, would have knowledge of the existence of insurance. Requiring disclosure by in-house counsel might cause others to believe they are covered under that insurance when dealing with the company itself, which would not be the case, and would, as mentioned, invite unnecessary and warrantless lawsuits.

A trendy idea not prompted by actual client issues- bad for Texans who need legal advice and their attorneys.

Disclosure is pointless, because regardless of disclosure or if one holds PLI, all attorneys are held to the same standards. It would merely create an additional burden.

Insurance is for the insured and has nothing to do with professional competence. When will the State Bar stop wasting time on matters that have nothing to do with maintaining lawyer professionalism?

NW

LPL insurance disclosure is inherently misleading to a client, whether couched as "I have a malpractice insurance policy," or "I don't have a malpractice insurance policy," or "I do not have a professional liability insurance policy with limits acceptable to the Bar."

1. LPL policies are written on a claims-made basis, meaning that the existence of a policy at the time the disclosure is made will likely have little to do with having an LPL policy when the claim is made, which can be years down the road. Lawyers change jobs; law firms go in and out of business; LPL prices go up and down; lawyers retire. If a lawyer is required to make a disclosure on Day 1 that the lawyer has an LPL policy and that status later changes, or the lawyer knows that status is about to change in the near future (e.g., because the lawyer has decided not to renew the policy, or can't get quoted for a policy, or is moving to a policy with materially different coverage and limits), would that trigger a further disclosure requirement? And if so, to whom? The lawyer's current clients? The lawyer's past clients who are still within the 2-year statute? Within the 4-year statute? Within the discovery rule period? The latter can easily be from the beginning of the lawyer's practice. (Wills, anyone? Prenuptial agreements?) This rapidly becomes an undefinable set. What is the lawyer to do? Send an annual "State of My Malpractice Insurance" letter to current and past clients? The Grievance Oversight Committee 2009 Report suggests limiting disclosure to "during the representation," which seems to wholly miss the nature of claims-made coverage and draw an unjustified distinction between current and former clients. Claims often show up for the first time after the representation has ended. In a disclosure regime, wouldn't the latter have an equal interest in learning of an impending change?

2. LPL policies are written with multiple exclusions, just as other insurance polices are. Some of the exclusions are specific to the lawyer's conduct (e.g., intentionally wrongful conduct exclusions); some are specific to practice areas (e.g., securities or IP exclusions); and some are specific to particular types of relief (e.g., exclusions for the disgorgement or restitution of fees). So the fact that the lawyer has an LPL policy may be of no benefit whatsoever to the client, whose take-away from the initial disclosure would most likely be that there will be insurance. To make a meaningful disclosure, the lawyer would fast have to become a student of the LPL policy. If the lawyer is hired to handle a matter that falls within a practice-area exclusion -- or may fall within it, or part of it may fall within it -- what would the lawyer do? A naked "I have LPL insurance" likely wouldn't do the trick without some further explanation, and crafting the explanation would quickly sink into the arcana of LPL policy exclusions as applied to hypothetical acts, errors or omissions the lawyer might commit in the course of handling the matter (and would make a nice "See, you knew we didn't cover that" piece for the LPL carrier if a coverage dispute later arose). What is the lawyer to do? Staple a copy of the policy to every engagement letter?

3. LPL policies are written with limits. In many instances, the limits are substantially less than the potential damages that could result from an error in handling the matter. If the lawyer carries a policy with $100,000 limits that liquidate with defense costs, then is the "I have insurance" disclosure meaningful to a client with a seven-figure matter? No, it's not. A naked "I have insurance" disclosure would leave clients with a false sense of security. The corollary to having so little insurance that the client's claim would likely dwarf it is having a retention so large that the client's claim will likely never trigger the actual insurance. How would a disclosure rule handle large retentions? LPL policies at large law firms often have substantial retentions -- $100,000 or $200,000 or $250,000 per claim -- which may underlay $10M or $15M or $20M in limits. The risk manager knows that, as a practical matter in any given year, 90% or more of the claims made will likely be disposed of within the retention. Buried in this structure is solvency risk, the risk that the firm proves unable to fund the retention. Does a naked "I have insurance" disclosure fit this circumstance? The Grievance Oversight Committee 2009 Report recognizes the solvency risk issue and suggests punishing a lawyer who miscalculates the risk: "The rule should also specify that the rule would be violated if a lawyer, or firm employing a lawyer, either knows, or has reason to know, that the deductible or self-insured retention amount cannot be paid in the event of loss."

4. The attempt to duck these issues via the sleight-of-hand of requiring disclosure of the absence of an LPL policy (versus the affirmative disclosure of the existence of a policy) -- for the lawyer to state, in the words of the Grievance Oversight Committee, "I do not have a professional liability insurance policy with limits acceptable to the Bar" -- suffers from the same problems. Just as lawyers go out of coverage, so, too, do they come into coverage. Lawyers join firms with policies; lawyers decide to buy a policy (which, even with a retro date as of inception might still provide coverage if the lawyer's error for an existing client comes after the retro date); some carriers offer career coverage endorsements for some risks. Thus, the non-existence of an LPL policy on Day 1 does not mean that there won't be an LPL policy if, as and when the client decides to make a claim, a decision potentially (mis)guided by the client's memory of the lawyer saying at the outset of the representation that there is no insurance. This comes full circle to the LPL status update problem discussed above.

5. Knowing that there is an insurance policy is quite different from knowing what the policy does and does not cover. Every day in mediation rooms and courtrooms across this state lawyers fight over what insurance policies mean and whether particular claims or parts of claims are covered under the unique circumstances of each case. It makes no sense to have a lawyer sit down with the client on Day 1 and attempt to make some disclosure, meaningful to the client (who in all likelihood has never read his or her own auto or home policy), about the state of the lawyer's malpractice insurance. Such a disclosure is not a meaningful proxy for the quality of the lawyer. (Do clients think a lawyer without malpractice insurance must be a bad lawyer since no one will insure him or her, or do clients think a lawyer with malpractice insurance must be a bad lawyer because good lawyers don't need malpractice insurance?) And such a disclosure is not a meaningful estimation of any reasonable probability that the lawyer will or will not have insurance coverage for a future claim by the client.

6. These are not idle theoretical questions. Any disclosure about insurance would have to be meaningful to the client, particularly if the goal is to assist the client in making a decision, such as whether to hire the lawyer, or whether to fire the lawyer who lets a policy lapse and get one who has insurance, or whether to sue the lawyer. Making a meaningful disclosure about the nature, scope and extent of the lawyer's present and anticipated future insurance is almost impossible. But that is what will be expected of the lawyer, particularly if this is written into the Disciplinary Rules of Professional Conduct. In legal malpractice claims, the TDRPC are commonly bandied about as minimum standards all lawyers must meet; they are not safe harbor rules. Thus, if a rule says the lawyer must disclose x about the lawyer's LPL policy, that will be expanded by the need to make the disclosure meaningful to this particular client under these particular facts. From there, it's a short step to a claim that the lawyer improperly procured the representation by failing to make a meaningful disclosure about the lawyer's insurance. On this point the Grievance Oversight Committee 2009 Report, which recommends the negative disclosure approach -- "I don't have insurance" -- is particularly unhelpful. It suggests that "[t]he Bar, as approved by the Supreme Court, should prescribe the form of notice in these circumstances so that clients get standardized notices," but at the same time "preserve and protect each attorney's opportunity to discuss privately with a prospective client the availability, or necessity of, insurance protection." That's a breeding ground for claims that the lawyer's private discussion -- "We've never needed it"; "It just made us a target for groundless counterclaims when we sued to collect fees"; etc. -- detracted from, minimized or trivialized the importance of the disclosure and the potential consequences to the client from the facts disclosed.

7. There are some special cases which bear mentioning.

8. How would a disclosure rule work for insurance defense lawyers? Texas has adhered to the concept that the insured is the lawyer's client. Would a disclosure rule require the insurance defense lawyer to make an insurance disclosure to each insured? The new checklist: open the file, run a conflicts check, file an answer, send out a request for disclosure, mail the insured a letter about the firm's insurance coverage (which must be signed by the insured/client, returned and kept in the insurance defense lawyer's file for the Bar's review on pain of violating the Disciplinary Rules) . . . .

9. How would a disclosure rule work for appointed lawyers? What would the purpose be? The lawyer gets appointed in a criminal case, or in a CPS termination case, or in a JV court proceeding. The client has little to no say about who the appointed lawyer is going to be. Why tack on an insurance disclosure requirement? And how does this work when the client is a minor? If you're appointed to represent the children in a CPS termination case, you may have clients so young that it's hard enough to communicate the nature of the termination proceedings, let alone explaining what LPL insurance is and why the child should or should not care about this issue. It makes no sense to add an insurance disclosure -- a meaningful disclosure -- in this circumstance. What do you do if you have been appointed to represent a party who can't be found, such as a biological parent who has disappeared in a termination proceeding or a lot owner in a tax sale case?

10. The Grievance Oversight Committee 2009 Report suggests exempting in-house corporate counsel from any promulgated rule. Why is that? Have they no client? Or does the Committee just mean to suggest that an in-house attorney does not need to make the disclosure to his or her corporate employer but would otherwise apply any rule to other clients. (Looking over that vacation condo lease for the president? Taking care of that traffic ticket for the CFO?)

11. An insurance policy is but one asset among many for the potentially liable lawyer. If there is to be a disclosure rule, is there a principled basis for limiting it to insurance policies? There are lawyers who don't carry LPL insurance but who have substantial assets. If insurance disclosure is meant to help the client answer the question of whether the lawyer can respond in damages, then wouldn't disclosure of personal net worth statements be of equal or, in many instances, greater assistance to the client? This is not as far-fetched as it sounds. The Grievance Oversight Committee 2009 Report includes this curious passage in supporting its recommendation: "From a consumer viewpoint, businesses are regularly required to disclose financial status under SEC requirements. Insurance companies are required to disclose information on claims paid experience, and Medicare has recently simplified comparison shopping of hospitals and care facilities by requiring disclosures on costs, treatment effectiveness. and risks for individual institutions." So why stop at insurance for lawyers?

12. LPL policies are risk-management tools for lawyers and law firms, akin to other risk-management-tools such as computerized conflict-checking systems, centralized calendaring systems, and the other risk-management items inquired about on most LPL policy applications, albeit different because those risk-management tools are directed at reducing the risk of making a mistake while LPL policies are directed at reducing the financial risk to the lawyer when a mistake is made. Most lawyers do not purchase LPL policies with the thought, "This will be a benefit for my clients." Instead, most lawyers purchase LPL policies with the thought, "This will protect my assets if I make a mistake." Unlike mandatory auto insurance, the legislature has not required lawyers to have LPL insurance or to carry proof-of-insurance cards around with them while representing a client. The comments above touch on the many practical problems with any form of a disclosure rule. The current state of any given lawyer's LPL insurance cannot be sketched out for a client in a meaningful manner in a few sentences. When the client is sitting in your office on Day 1, could you provide a meaningful and truthful answer to the question: "If you do something wrong in handling my matter and I decide to make a claim against you, will you have insurance coverage for that claim?" The proposed disclosure requirement is an attempt to answer that question by proxy but an insurance disclosure rule is such an imperfect proxy, and so difficult to implement in a meaningful fashion which avoids misleading a client, that no disclosure requirement should be adopted.

It's nice to see that attorneys so thoroughly understand the reasons why physicians, accountants, engineers and other professionals find requirements to carry malpractice insurance so odious.

While it is certainly more difficult to sue an attorney than another professional, simply because sharks rarely eat their own, the ability of attorneys to practice negligently, refuse to honor a client's wishes, put themselves or their firm ahead of the client or otherwise take action (or inaction) injurious to a client is well known and amply demonstrated.

Perhaps the state bar would like to submit the issue to an impartial panel - say one formed by the AMA - in order to completely explore the manner in an efficient and nondiscriminatory fashion. What say you?

this is hilarious and absolutely needs to happen.

I am in complete agreement with my medical collegues. There is quite a bit of irony in this thread. I live in Florida and we currently have a lagre personal injury firm that is fighting to get "disclosure" of insurance to be law so that juries can award ample awards.

Why is that Lawyers as professionals do not have to live up to the same standards as other professionals (like physicians). We are required in Florida to carry malpractice insurance or have a statemtn of finances available to cover the minimum amounts. If we "go bare" this needs to e disclosed to the patient at the time of their visit. Again what joyful irony you all present.

For a myriad of reasons, including many of those cited by others above, I strongly oppose the disclosure requirement.

Terrible idea. Clients would just have a new way to skitter out of paying what they owe. They already think it is unfair they have to pay us anyway. Why give them more ammunition? Doctors are not required to disclose their insurance status why should we?

physician malpractice = good thing
lawyer malpractice = bad thing

What color is the sky on Bizarro Lawyer World?

I carry 1M/3M malpractice and it is well known that I must have this or I could not practice at all. It does not invite lawsuits, it does not change the way I practice. I am certain my practice has more unhappy clients than most, but it is the nature of my practice. I think you guys should step up and just buy a premium and proudly display it. I think I am that good, and if a mistake is made with dereliction, damages, deviation, and duty- then that is what my premiums are paid up for.

I can't believe all the whining on this board...

Physicians for the most part have to carry malpractice insurance (especially if they want to have any hospital priviledges). Those premiums are typically 30-80k/year...

Plumbers have to carry liability insurance (otherwise you'd be a fool to hire them)...

Why shouldn't lawyers be required to carry some type of PLI?

It is funny how so many of you (lawyers) reveal your anxieties on this board about the perceived implications of having insurance, when most of you have NO compunction at all about going after physicians and other high earning individuals. ...

It has been said in earlier posts, but needs to be repeated: you cannot use physicians as an example of why disclosure is bad. WE ALL HAVE TO HAVE MALPRACTICE INSURANCE. Period. No exceptions (except apparently Florida). There is no disclosure issue because everyone has it.

We agree with you that insurance requirements are onerous for many reasons; but you are only seeing this now that it affects you.

Even if we were to accept the proposition that insurance disclosure is somehow helpful to a client, (although that argument does not seem to be supported by emperical evidence) the proposed disclosure is grossly misleading. As most lawyers know, the determination of the availablity and the limits of insurance coverage has been and continues to be the subject of great debate between insureds and insurance companies. It is not uncommon for one to have an insurance policy and believe coverage is available for an event when, in fact, no coverage is present. So if the presence or absence of insurance coverage is to be a critical factor in selection of counsel, is a comprehensive opinion on the presence of coverage for a particular case to be obtained prior to the accepatance of every case? Wouldn't it be a conflict of interest for the lawyer involved to issue the opinion? Wouldn't every lawyer have to hire other lawyers to provide the opinion? If anything less is done, if the only thing that is disclosed is the "fact" that someone has paid a premium for some type of insurance that may or may not cover any given malpractice, how does that assist with the selection of counsel if coverage in fact is the important criterion? As far as I can tell, the rule as stated would mislead more than it would assist. A practical rule is not apparent.

Lastly, I carry a very large insurance policy. I have thought this to be the responsible thing to do both for my clients and my personal assets. But if this passes, I will dramatically reduce what I carry because I am certain that it will make me a target when I otherwise would not be.

To the medical professionals who find this board ironic: I do not know whether my doctors do or do not have mal-practice insurance. I hope they do because I consider it to be a responsible thing to do. But they have been the physicians that I have trusted for over 20 years without a clue about the status of their insurance coverage. I cannot imagine asking them to disclose it. Nor would I select a health care professional based on whether he or she had insurance or recommend that anyone else do so. If people start making decisions based on that, heaven help us all.

These comments are interesting if looked at from a doctor's perspective. We must fully disclose and have state mandated levels of coverage. Is you concern that it invites litigation? drives up operating costs? is not a need-to-know issue for the client. I certainly agree on all accounts.
I feel for you, but this was started long ago...

Are we even going to acknowledge the fictitious claim of public's best interest here? Let's be realistic, this was initiated by the insurance companies, and how the topic weaseled it's way into legitimate debate confounds but doesn't surprise me. But it does make me enjoy my job even more.
It is a pointless idea because it will give the client unreasonable expectations of the litigation process, i.e., that they can just sue the lawyer if they lose in court.

Every lawyer advertising as "the Eagle" or "the Tiger" or "The Elephant" should just take this paragraph and insert 'physician' where appropriate. So now, after suing a 1) physician for trying to practice good medicine 2) company or organization who had no culpability in an injury to make a buck, if you lose the aggrieved patient will sue you. This is just, well, awesome. Karma rules!

Are we even going to acknowledge the fictitious claim of public's best interest here? Let's be realistic, this (litigious behavior by patients seeking compensation via insurers) was initiated by the insurance companies (lawyers), and how the topic weaseled it's way into legitimate debate (medical practice) confounds but doesn't surprise me. But it does make me enjoy my job even more (less).
It is a pointless idea because it will give the client unreasonable expectations of the litigation process (their medical care), i.e., that they can just sue the lawyer (doctor) if they lose in court (don't like how things turned out).

While I am in favor of attorneys maintaining professional liability insurance, I am opposed to the idea of yet another mandate from another governmental or quasi-governmental entity. We have enough stupid notices and disclosure requirements.

We are regulating our society to the point that those who wish to comply are overwhelmed, those who would not comply still don't, and the public is not half a whit better off or better informed for all of the notices and disclosures. This sounds like some bad idea that sounded good at the moment and no one in committee had the courage to say, "gimme a break."

This idea needs to be rejected.

I oppose this proposal for a number of reasons. Malpractice insurance is for the benefit of myself and my partner to protect our assets against potential claims. It is not a benefit for our clients. Although we have always carried insurance, it places a huge burden on sole and small practitioners. This disclosure would create unfair competition across the board. Further, clients would have a false sense of security as to actual coverage.

This is a truly bad idea. While malpractice insurance can be a good idea to protect the client, mandatory disclosure will be like waving a flag in front of a bull. We should not be inviting lawsuits from our clients. Moreover, disclosure may distract clients from seeking other, more productive forms of disupte resolution.