Rule Exists in Few States

A PROPOSED NEW conduct rule being considered by the NH Supreme Court Advisory Committee on Rules would make NH one of just a handful of states nationwide that requires attorneys to notify clients if counsel does not maintain a minimum level of professional liability insurance.

The Rules Committee is considering a new Rule 1.17 of the Code of Professional Conduct that would require disclosure to clients if an attorney does not carry at least a minimum of $100,000 per occurrence and $300,000 in the aggregate in malpractice insurance coverage. Notice would be provided to the client on a separate form to be signed by the client and kept on file by the attorney until at least five years after termination of representation.

If NH approves the new rule, it would join Ohio, Alaska and South Dakota as those jurisdictions that require client notification if an attorney isn’t covered by professional liability insurance, according to US Law Week (May 29, 2001). Oregon is the only state that mandates malpractice insurance as a condition of practicing law.

According to David Peck, secretary to the Rules Committee, a letter from Professional Conduct Committee Chair Robert Varney prompted the committee to consider the new rule for possible recommendation to the Supreme Court. Peck drafted the NH insurance disclosure rule based on similar rules of other states.

Varney said he first heard about an insurance disclosure rule at an ABA conference of chief justices and heads of judicial disciplinary agencies held in San Diego about a year ago, which he attended with NH Supreme Court Chief Justice David A. Brock. "A common theme [of discussions] was the increasing expense of malpractice insurance and the decreasing number of attorneys getting it," said Varney. A San Diego Bar member presented the idea of an insurance disclosure rule, and Varney thought it was a "wonderful idea," so he later wrote a letter to Brock to present the proposal. Since the PCC doesn’t make policy, Varney said he wasn’t recommending the rule in his capacity as PCC chair.

The proposal found its way to the Rules Committee, which has not yet taken a position on the proposal and will hold a public hearing on it (and on other proposed rules changes) on June 26. Based in part on public reaction to the proposed insurance disclosure rule, the com mittee will then decide whether to recommend new Rule 1.17 to the Supreme Court for addition to the Code of Professional Conduct.

Varney, who will leave the PCC in July after 10 years of service to the committee, said that he is pleased that the Rules Committee is considering the insurance disclosure rule because he sees it as a simple solution to a problem he has seen too many times as a PCC member. "I’ve seen quite a few instances in which an attorney has let a client down, has committed malpractice, and is without assets to compensate the client for that. It’s difficult to look at that client and tell him or her nothing can be done," said Varney.

"This rule seems like a quick, simple and very effective way to encourage attorneys to purchase malpractice insurance. This way, when a person selects an attorney who doesn’t have malpractice insurance, he knows right where he stands," he said.

A public hearing on this and other changes being considered by the Rules Committee will be held on Wednesday, June 26, 2002, at 1 p.m. at the Supreme Court, Noble Drive, Concord. Copies of the changes being considered are available on request from the secretary of the Rules Committee, NH Supreme Court, Noble Drive, Concord, NH 03301 (phone 271-2646). The proposed changes are also available online at www.state.nh.us/courts/supreme/proposed/r200204.htm. Written comments on the proposals should be sent to the Rules Committee at the above address by June 25.

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