Samuel C. Stretton. Samuel C. Stretton.

Lawyers should have malpractice coverage although there is no requirement to do so.

I am about to be sued and I don’t have legal malpractice insurance. Will I have any problems because I don’t have malpractice insurance?   

As has been said in past articles, there is no requirement in Pennsylvania to have legal malpractice insurance. Unlike doctors, lawyers do not have a mandatory requirement to maintain legal malpractice insurance. Perhaps someday that will occur, though hopefully it will not.

On the other hand, it’s an excellent idea if one can afford it to have legal malpractice insurance. The premium is not that expensive and at least most insurance carriers will allow the attorney to finance the policy premium over the year. For a solo practitioner in general practice, usually the premium is in the range of $2,000 to $3,000 a year for a $1 million policy.

The reason to have malpractice insurance is that no one is perfect and even the best lawyers make mistakes. Obviously, most lawyers do not have the wealth or assets to be able to compensate a client if a lawyer’s mistake cost the client substantial funds or prevented the client from getting a valid recovery for severe serious injuries. Malpractice insurance coverage is a responsible way to ensure a client can recover damages if the lawyer does make a mistake.

There is no punishment if a lawyer does not maintain the policy. But, the lawyer has to fill out in their annual registration form whether they maintain professional liability insurance or not. Second, the lawyer has to notify every client, in writing, under Rule 1.4(c) of the Rules of Professional Conduct that the lawyer does not have professional liability insurance of at least $100,000 per occurrence and $300,000 on the aggregate per year. The lawyer also has to inform the client if the lawyer does have malpractice insurance any time the lawyer’s malpractice insurance drops below the $100,000/$300,000 amount or the lawyer terminates the malpractice coverage. The lawyer has to maintain a record of these disclosures of not having the policy or termination for a period of six years. The actual language to be sent in the letter is set forth in Rule 1.4(c) and the comment. The comment to Rule 1.4 in paragraphs 8 and 9, discuss the language suggested. Obviously, a policy of $100,000/$300,000 is extremely low. Normally, a $1 million policy can be obtained without a much higher premium. But, the lawyer has to notify the client if the lawyer doesn’t maintain malpractice insurance, in writing, when the representation begins. This is done in the fee letter or some separate letter. The lawyer must always notify the client if the insurance coverage is terminated or has lapsed.

Therefore, to answer the question, no one will discipline a lawyer for not having malpractice coverage, but the lawyer can be disciplined if the lawyer didn’t properly notify the client about the lack of coverage or termination of the coverage.

Rule 1.4 has been in effect now for a number of years. It would also seem that it’s time for the rule to be changed to increase the required amount from $100,000/$300,000 to at least $500,000/$1 million or perhaps more.

Every lawyer should attempt to have legal malpractice insurance. A serious mistake a lawyer can make is not telling the client. Unfortunately, this happens more than one likes to imagine. The failure to disclose is normally not done for malicious reasons. Normally it’s done because most lawyers aren’t aware of Rule 1.4(c), even though they should be.

In conclusion, lawyers should have malpractice coverage although there is no requirement to do so. But, if one can’t or doesn’t have the funds to pay the premium, the lawyer must send the appropriate notices under Rule 1.4(c) of lack of coverage.

A lawyer can report a client’s abuse if he’s trying to prevent bodily injury.

I am a domestic lawyer and I suspect a client is abusing a child. Do I have an obligation to report that?

Under the Rules of Professional Conduct, if information is obtained in the attorney-client privilege, there are still exceptions to the privilege under Rule of Professional Conduct 1.6(c). One of these exceptions is to prevent reasonably certain death or substantial bodily injury. One could argue sexual abuse can result in substantial bodily injury and psychiatric harm. Therefore, a lawyer can report the information under this limited exception. This exception to the privilege under Rule 1.6(c) is an optional exception, not mandatory.

Lawyers are not under the same reporting requirements as many other professionals are. The reason is because of the Pennsylvania Supreme Court’s regulation of the legal profession through Article V of the Pennsylvania Constitution. This would be a violation of the doctrine of Separation of Power and the constitutional responsibility of the Supreme Court to regulate the legal profession.

Under 23 PaCSA 6311(14), a lawyer affiliated with an agency or institution or other entity such as a school or an agency established for the care or supervision of children must report an abuse. But, this rule might be unconstitutional since it infringes on the Pennsylvania Supreme Court’s constitutional duties to regulate the legal profession.

If a lawyer does discover the child is being abused, it would appear the lawyer could exercise the exception under Rule 1.6 for serious bodily injury. The lawyer will have to decide this issue case-by-case. The mandatory reporting requirements that other professionals have would not apply to lawyers for the reasons stated above.

Chester County lawyer Samuel C. Stretton has practiced in the area of legal and judicial ethics for more than 35 years. He welcomes questions and comments from readers. If you have a question, call Stretton directly at 610-696-4243 or write to him at 301 S. High St. P.O. Box 3231, West Chester, Pennsylvania, 19381.