CBJ - October 2009 #02. Insurance disclosure rule approved.


California Bar Journal


CBJ - October 2009 #02.

Insurance disclosure rule approved

California Bar JournalOctober 2009Insurance disclosure rule approvedUnder a new Rule of Professional Conduct approved by the Supreme Court in August, lawyers who do not carry malpractice insurance must tell their clients - under most circumstances - that they are not insured. Rule 3-410 takes effect Jan. 1.

The five-part rule has these requirements:

Notification that a lawyer does not carry professional liability insurance must be made in writing at the time a client hires the lawyer, if it is "reasonably foreseeable" that the representation will exceed four hours. If the insurance coverage later lapses, the attorney must tell the client within 30 days of the time he or she is no longer insured. Government lawyers and in-house counsel are exempt. The rule does not apply to legal services given in an emergency to avoid prejudice to a client's rights or interests. The rule does not apply if the lawyer previously informed the same client that he or she is not insured.

The rule was three years in the making and led to sharp division within the State Bar Board of Governors. The final proposal was the fifth version of a rule that was first recommended in June 2006.

The American Bar Association adopted a model rule in 2004 concerning malpractice insurance disclosure; 23 states have adopted some type of disclosure requirement.

Chief Justice Ronald George appointed a task force that proposed a new rule of professional conduct requiring disclosure to the client and a new rule of court requiring disclosure to the bar. The bar would, in turn, have identified those without insurance on its Web site.

The proposal sparked widespread opposition from solo and small firm lawyers, who complained they would be disproportionately affected, as well as the Conference of Delegates of California Bar Associations and other local bars.

Proponents, including bar committees on...

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