The Supreme Court of Texas has asked the State Bar of Texas Board of Directors to make recommendations in early 2010 regarding if Texas lawyers should disclose to the public whether they are covered by professional liability insurance (PLI). The expense of medical malpractice insurance, the practice of "defensive medicine" and the filing of frivolous lawsuits are routinely cited as factors contributing to soaring health care costs. In light of the health care debate, the current unveiling of the Texas legal industry's attitude toward its own professional liability is timely and worthy of interest.
Texas attorneys are not required to carry PLI. In fact, the American Bar Association reports Oregon as "the only jurisdiction that requires its lawyers to carry malpractice insurance." For some occupations, insurance is mandated, for others it's simply seen as a necessary (and responsible) business practice. While Texas attorneys seem to recognize the benefit of their industry's exemption from PLI, they seem resistant to the public being fully informed of this status.
Recent public hearings in Harlingen and San Antonio provided an opportunity for interested parties to speak on the PLI disclosure issue.
Comments are also being solicited via the Texas Bar Blog. Here is a sampling of views expressed:
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.
I think it is a bad idea. Clients could simply inquire about it if necessary. Clients come to us for litigious reasons in the first place, to make this disclosure offers them another avenue of recourse - against the attorney. In other words, we would just be planting a seed in their minds. Plus, smaller offices may not have the insurance for financial reasons and to force the disclosure carries a sense of not being a good lawyer.
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.
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.
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.
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?
I agree with the majority that this will do nothing but encourage already litigous clients and create more lawsuits. It serves as no protection to the public. As many others have said, why does my doctor not have to disclose what he has to me? I vote NO!
Quote: "Are doctors required to disclose whether or not they have liability insurance?"
JACHO requires hospitals to require insurance as a part of accreditation. That is kind of like stating that before you can practice in Court or before any agency you have to have insurance on file there. I think that is a bit rigorous to say the least (in other words, I don't think attorneys should have insurance requirements like doctors do).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.
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...
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.
PLI is obviously viewed as a significant operating expense that some attorneys elect to forego. The Texas Bar Blog features substantive comments and arguments on this issue. However, the obstacles and hardships discussed are no different from those faced by many other businesses.
In today's corporate climate, the need for liability insurance and efforts to avoid litigation have transformed business operational modes. Malpractice insurance disclosures could provide a sense of "deep pockets" and incite lawsuits? Thanks to the legal industry, many companies live with that threat on a daily basis. The disclosure of PLI could harm solo practitioners or small firms? This is no more harmful than small business owners across this country who fear a litigious challenge might at any time wipe them out. Remember the Washington D.C. dry cleaners? And of course the activities of the American Trial Lawyers might likely provide a template for the "follow the money" comments that accuse insurance companies of promoting this disclosure effort as a self-enrichment mechanism to prompt the sale of PLI policies.
The health care debate rages on with insurance consumers at risk of losing their current coverage due in part to unnecessary liability costs for defensive medicine and frivolous lawsuits that are nothing more than the legal industry lining its pockets at the expense of the American public.
Will public disclosure of lawyers' professional liability insurance become a mandate here in Texas? Who knows. If it does, will it provide consumers increased protection? Maybe, but not necessarily. But if nothing else, this exercise has demonstrated that the Texas legal industry understands the pitfalls of liability costs, the challenges of becoming a legal target and strongly opposes their own potential subjection to any such measures. Many Texas Bar Blog comments referenced doctors and the medical community. Lawyers understand that what's been done to health care could be done to them. That's irony.
NOTE: Public input on this issue is invited. Comments can be left at Texas Bar Blog or letters can be sent to statebarpresident@texasbar.com.
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