Calif. State Bar considers mandatory malpractice insurance disclosure

The California State Bar is considering whether lawyers in the Golden 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 California lawyers should be required 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 1995-1996 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 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.”

Twelve states have adopted requirements similar to the Model Court Rule on Insurance Disclosure. The rule requires lawyers to certify whether they are currently covered by professional liability insurance and state their intention to maintain insurance while practicing law. Lawyers employed by government or as in-house counsel are exempt. Lawyers must give notify the court if the insurance policy lapses.

Additionally, information in the certified disclosures is public. Failure to comply with the certification requirement results in administrative suspension from the practice of law. False information would lead to discipline.

Until five years ago, state laws required California attorneys without PL insurance to disclose that fact in their written attorney fee contracts with clients. The laws sunsetted in 2000.

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

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