CSB proposal unfairly targets plaintiffs’ counsel

By Eric J. Parker
October 30, 2006
Massachusetts Lawyers Weekly

To the editor:

You have to believe that the Clients’ Security Board’s recent proposal, which would require insurance carriers to notify claimants when their lawyers receive a settlement check, was well-intentioned. It is, after all, the mission of the CSB to protect clients from dishonest lawyers. But you have to wonder where the board draws the line when it comes to deciding exactly what it is that clients need protection from.

One would assume that the genesis of the proposed notice requirement was a relatively high number of reported instances where plaintiffs’ lawyers received settlement payments from carriers but failed to disburse those funds to their clients.

Given the fact that plaintiffs’ lawyers are required to clear insurance recoveries through IOLTA and gain no significant benefit in delaying the disbursement of funds to their clients — other than outright stealing — it’s hard to imagine that “delayed payments” to clients was responsible for this proposed rule.

The rule, which would circumvent the long-held prohibition against insurers having direct contact with a legally represented party, would alert clients that their settlement proceeds were in their lawyers’ hands. Certainly not an unreasonable idea.

But then, why stop there? Why not propose a rule that would require insurance defense counsel to alert insurance carriers when plaintiffs’ lawyers had extended an offer to mediate or arbitrate a case — which may well end litigation and thereby reduce legal fees to the insurer?

And what about a rule that would require corporate counsel, at Boston’s largest law firms, to alert their clients in writing that associates, even partners, are “expected” to bill no less than 2,600 hours per year? Would that rule not protect corporate clients as well? That might not be good for “business.”

That a small number of dishonest lawyers do, in fact, defraud their clients each year is beyond dispute. Such conduct is reprehensible and should result in severe punishment — both civil and criminal penalties.

This proposed rule — which assumes misconduct until proven otherwise — is not evenly applied to all attorneys in all areas of practice. It unfairly targets plaintiffs’ counsel and unjustly empowers insurers by undermining the claimant’s attorney-client relationship — something the CSB should protect with an equal degree of vigilance.

Eric J. Parker
Boston

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