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Make your voice heard on insurance

By Diane Karpman

Diane Karpman

A proposed new insurance disclosure rule is being circulated by the State Bar (for the third time) for public comment by March 17. It would be Rule of Professional Conduct 3-410, requiring a lawyer to disclose to clients the absence of malpractice insurance. If such a rule were enacted, not having coverage wouldn’t be just a business decision but, if not disclosed, could result in discipline.

If we really want to do something about legal malpractice claims, we should be teaching the subject in law school. We learn all types of esoteric useless subjects, such as riparian rights and the Rule against Perpetuities. Yet nobody teaches us how to defend ourselves.

The seminal torts casebook, Torts: Cases and Materials, 10th Edition (Prosser, Wade and Schwartz), has but a couple of paragraphs on the topic. In torts classes, a student is lucky if a single day is allocated to professional and other fiduciary duties. Sure, we teach professional responsibility so that students can pass the PR exam, but those concepts sort of “float” in a vacuum, without substance or foundation.

We should be teaching each other how to prevent the claim, how to defend the claim and the unique issues that arise in claims of errors and omissions, such as the requirement of proving the “case-within-the-case.” Susan Fortney, a professor at Texas Tech, has just published Legal Malpractice Law: Problems and Prevention, a book designed to teach students the hardcore architecture of claims.

Thankfully, I haven’t seen a casebook in years but this one reads like a novel. The book explains the theories of liability, garden-variety negligence and breach of fiduciary duty. It uses the umbrella term “malpractice” to cover a range of professional liability claims. There is a laundry list of special traps: client relations (screening, communication); conflicts of interest (the perennial favorite); litigation errors (including missed deadlines); appellate practice; settlement errors; business transactions with clients; fee arrangements; breach of confidentiality and the minefield of representing entities.

The book is loaded with risk management tips on how to prevent malpractice. For example, it’s important to mark the end of representation. It limits your liability for future errors and omissions, and opens the door for a more lenient conflict rule classification, since it would clearly be a “former” client. Most lawyers are reluctant to say, “It’s over.” A nifty way of accomplishing this goal is to send a “thank you” to the client for giving you the opportunity of providing legal services, with an invitation to call in the future should the need arise. Subtle, yet effective.

Please look at the proposed rule. It is on the State Bar Web site,, under “Public Comment” in the right-hand menu. Consider the ramifications of mandatory insurance disclosure. You can respond online at Many of you have commented in the past about stigmatizing lawyers, the increased costs of service for clients and denying legal services to the poor and almost poor. You have a voice; please use it.

• Diane Karpman, a legal ethics expert, can be reached at 310/887-3900 or at

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