Texas Bar exec board says “no” to PLI disclosure

Texas Bar exec board says “no” to PLI disclosure
Lou Ann Anderson
February 1, 2010
www.EstateofDenial.com

With a vote of 39 to 1, the State Bar of Texas Board of Directors voted Friday to recommend to the Supreme Court of Texas that legal clients not receive additional consumer protections that would flow from “customers” being informed as to whether or not their lawyers carry professional liability insurance (PLI). The Bar’s input is due to the Supreme Court before Feb. 5.

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 a fact-of-life, for others it’s simply seen as a necessary (and responsible) business practice.  Texas attorneys seem to recognize their industry’s aversion to PLI and seem resistant to the public’s being openly informed.   The legal industry provides services to a consumer base yet the industry’s self-regulating and strongly protectionist organization creates inherent conflict when consumers seek protections similar to those provided by customer-oriented industries.

Per Texas Bar Blog comments, PLI is characterized as a significant operating expense that some attorneys elect to forego.  The Blog features arguments against disclosure, however, the obstacles and hardships discussed are no different from those faced by many other businesses.

In today’s corporate climate, needs for liability insurance and efforts to avoid litigation have transformed business operational modes.  Bar Blog posts lament how 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 what irony that the industry which spawned the Association of Trial Lawyers of America (now re-branded as the American Association for Justice) – an organization proficient in staunch support of pro-legal industry candidates, campaigns and legislation – would accuse insurance companies of promoting this disclosure effort as a self-enrichment mechanism to prompt the sale of PLI policies.

Through the Bar’s Grievance process and the State Commission on Judicial Conduct, the legal industry feigns the appearance of consumer recourse or protections, but it doesn’t take much to expose a different reality. The PLI vote provided legal industry leaders the opportunity to upgrade their public image by taking an unusual stance toward uncharacteristic transparency which would have benefited their consumers.  Instead, a continued self-serving approach to protecting their own interests was chosen.

In light of the vote, consumers should adopt the legal industry’s protectionist attitude and upon meeting with prospective attorneys, pointedly asking if they carry PLI.  For an industry that decries the need to tell “the truth, the whole truth and nothing but the truth,” hesitancy or resistance to such disclosure will say much.

Lou Ann Anderson is an advocate working to create awareness regarding the Texas probate system and its surrounding culture.  She is the Online Producer at www.EstateofDenial.com and a Policy Advisor with Americans for Prosperity – Texas Foundation.  Lou Ann may be contacted at info@EstateofDenial.com.