In Oregon, you just ante up

by Kathleen O. Beitiks
Staff Writer

Professional liability insurance has been mandatory for attorneys in Oregon since 1978, with each bar member in private practice assessed $2,300 for coverage.

According to Kirk Hall, chief executive officer of the Oregon bar's professional liability fund, the fund was initiated by the state's lawyers when the insurance crisis of the mid-1970s resulted in high prices and low availability.

The bar studied the issue, obtained approval from members at an annual meeting and managed to get state legislation passed requiring attorneys to carry coverage and permitting the bar to establish a professional liability program.

Today, there are roughly 9,600 active members of the Oregon State Bar, with two-thirds (about 6,100) in private practice and covered by the mandatory program. Exceptions are government lawyers, house counsel, corporate counsel and professors.

"The cost is based solely on claims experience in Oregon," says Hall, "and there is no deductible."

Coverage amounts to $300,000 per claim, $300,000 aggregate and $25,000 in additional defense costs.

Since every attorney is individually covered, says Hall, that means a small firm of five lawyers could have about $1.5 million in coverage.

The fund also provides loss prevention programs to assist lawyers with alcohol-, drug- or stress-related problems.

Hall acknowledged it would be tough to set up a similar system in California with so many lawyers and such a variation in practices. In addition, he says, right now the private market is "soft," which means there are many companies offering professional liability coverage at prices "not extraordinarily high."

Since consumer protection seems to be a major concern of supporters of mandatory malpractice insurance in California, Hall says he thinks the solution is simple.

First, he says, require all fee agreements to indicate if the attorney has coverage, its limits and the name of the carrier. Second, on annual bar dues renewals, require attorneys to list the name of their professional liability carrier. "That way, the bar can gather information and determine if there is a problem," he said.

Hall says he receives many calls from other state bars inquiring about Oregon's program. "They're usually very enthusiastic," he says. "Then, about three months go by and I don't hear anything. Then they call back and say 'it won't work here.' "

Oregon's experience may be unique in the U.S., but not in other countries. "Every province in Canada, every state in Australia and the British Isles has it," says Hall.