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No one knows for sure how many California lawyers lack malpractice insurance, but estimates run as high as 20 percent. That means almost 31,000 of the state’s nearly 153,000 active lawyers have no way of compensating clients if they mess up a case. Tough luck for the consumer. But that could change under a proposal now being circulated by the State Bar to enact rules requiring attorneys to tell new clients if they don’t have malpractice insurance. That way, proponents say, the average Joe or Josephine will have a solid basis for deciding whether to retain an uninsured lawyer � or opt for someone else. “This is a highly relevant piece of information,” James Towery, chairman of the Bar’s Insurance Disclosure Task Force, said Saturday shortly after presenting the recommendation to the State Bar Board of Governors. “Most new clients assume their attorneys have insurance.” Towery, a former State Bar president and a partner in San Jose’s Hoge, Fenton, Jones & Appel, said that as it stands now, clients whose lawyers steal funds from them can recover money from the Bar’s Client Security Fund. Whereas, he added, clients have little or no recourse for an act of negligence � such as missing a critical filing date � that ruins their cases. “The lawyer’s client can be left with no remedy at all,” Towery said. The Board of Governors approved sending the recommendation out for 90 days of public comment where it’s likely to encounter some resistance, especially from solo practitioners who often find the price of malpractice insurance far beyond their means. Edward Poll, a former solo who now runs a consulting business for lawyers, attended Saturday’s meeting and afterward called the proposal “outrageous.” Poll, owner of the Venice-based LawBiz Management Co., argued that the cost of malpractice insurance � which he and others estimate at $4,000 to $7,000 a year � could force many of the state’s lawyers out of business or into the poor house. He pointed to a State Bar survey released in February showing that 25 percent of the state’s lawyers earn less than $50,000 a year. The same survey revealed that 49 percent of the legal profession makes less than $99,999 annually and that 40 percent of the state’s lawyers are solos. Another 38 percent work in firms with between two and 20 attorneys. “This program makes a demand without the ability to fulfill it,” Poll said. Oregon, he said, mandates malpractice insurance for all its lawyers. “But the bar provides affordable insurance,” he noted. The 15-member State Bar task force was pulled together in May 2005 by then-State Bar President John Van de Kamp in consultation with the California Supreme Court. Chief Justice Ronald George had received a letter in 2004 from the chairman of the American Bar Association’s Standing Committee on Client Protection, advising that the organization had adopted a model disclosure rule and expressing hope that California would follow suit. Eleven states already have adopted the ABA rule, which requires attorneys to disclose their lack of malpractice insurance on annual registration statements. Five other states require direct disclosure to clients instead. The California task force took the unique step of choosing to recommend both forms of disclosure. Towery told Bar governors Saturday that there was “absolute merit” in both ideas, but that task force participants felt neither was sufficient alone. Clients most often harmed by malpractice are the “least sophisticated and the poorest,” he said, people “not likely to use the Internet” to check a State Bar Web site to see if their prospective attorney is insured. So face-to-face disclosure was recommended to cover all bases. In many ways, the proposal is nothing new. The Legislature in 1992 passed a bill requiring insurance disclosure by attorneys, but a year later the California Trial Lawyers Association � now the Consumer Attorneys of California � tried to eliminate what it perceived as an onerous, and unfair, burden. The organization succeeded in getting a sunset clause, which eventually repealed the statute � Business and Professions Code � 6147 and 6148 � on Jan. 1, 2000. Consumer Attorneys of California President Frank Pitre, a partner in Burlingame’s Cotchett, Pitre, Simon & McCarthy, said Tuesday the group intends to survey its members and “rehash some of the issues.” Simply because attorneys have malpractice insurance, he said, doesn’t mean they have enough to cover a claim or that they’re necessarily competent. “The inference here,” Pitre said, “is that if you’re not insured, somehow or other you’re less qualified to do the work or you’re perceived as a lawyer who’s a bad lawyer.” Pitre, who served on the State Bar task force for a short time, said he “shudders” at the thought that disclosure might “stigmatize” a young lawyer or solo who simply can’t afford the premiums. Representatives of the State Bar’s Solo and Small Firm Section couldn’t be reached for comment on Tuesday. But Poll vowed to kick and scream a lot on the behalf of solos. “I will do what I can,” he said, “either to kill [the idea] or force the Bar to get affordable insurance.” Attorneys who have practiced law five to 15 years without insurance, he said, are the ones who will be rejected by insurers because of all the baggage they’ve built up over the years. And those are the attorneys, he added, who have mortgages and children in college. “The concept of insurance is not a bad idea,” Poll said. “But not providing a plan of affordable insurance isn’t right.”

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