After accumulating a considerable amount of data, and hearing
from other states, from WSBA members and regulators, and
from industry professionals, the Task Force reached a consensus that uninsured lawyers pose a distinct risk to their clients
At this point, the Task Force favors
mandatory malpractice insurance
through a free-market model
(allowing lawyers to purchase
insurance from any provider they
wish) as a condition of licensing.
Still to be determined are categories
of lawyers to be exempt, such as
government and in-house private-company lawyers, and non-practicing
attorneys who maintain their licenses.
Also yet to be determined is the
recommended minimum level of
coverage to be required.
The Task Force will continue to meet in the coming months to
hone in on remaining issues, discuss modeling, and draft its detailed proposal, including proposed court rules, for the board’s
consideration. The final report is due to the Board of Governors
in January 2019.
TASK FORCE HISTORY AND PROCESS
As specified by the Washington Supreme Court in General Rule
12. 1, a key objective in regulating legal services providers is
protection of the public. Consistent with this objective, the
Washington Supreme Court Admission and Practice Rules currently require lawyers to annually report whether they are covered by professional liability insurance. By contrast, Washington’s two other licenses to practice law (Limited License Legal
Technicians and Limited Practice Officers) are obligated to
show proof of financial responsibility (which is typically established by certifying malpractice insurance coverage). Recognizing this anomaly, and bearing in mind the responsibility to regulate the profession in the public interest, the Board of
Governors in 2016 formed a work group to study Washington’s
current and historic approach to malpractice insurance for all
license types. The current Task Force was formed to research
the topic in greater depth, gather member input, and make a
recommendation to the Board.
Since its first meeting in January 2018, the Task Force has
focused on information gathering and has reviewed WSBA data
on Washington lawyers, mandatory malpractice insurance requirements in other jurisdictions, national research on lawyers
who go uninsured, an ABA study of malpractice insurance, data
from insurance-industry professionals, and the experience of a
legal malpractice plaintiff’s lawyer. The Task Force has also solicited and examined WSBA member comments.
APPROACHES IN WASHINGTON AND OTHER JURISDICTIONS
The vast majority of common-law and civil-law countries outside the U.S. require some form of malpractice insurance for
lawyers in private practice. In the U.S., many jurisdictions like
Washington require lawyers to report and/or disclose whether
they are covered by professional liability insurance. Only two
states, however, currently require insurance as a condition of licensing: Idaho (open-market model, minimum limit of $100,000
per occurrence with a $300,000 annual aggregate) and Oregon
(bar-created professional liability fund, $3,500 annual per-member assessment, and $300,000/$300,000 coverage). Illinois
requires any lawyer who does not carry liability insurance to
undergo an online practice assessment that also provides four
hours CLE credit. The State Bar of Nevada has submitted a
mandatory malpractice insurance rule for consideration by the
Nevada Supreme Court, and the State Bar of California is studying whether to require professional liability insurance.