William Saturley, an attorney whose practice includes malpractice defense, said HB 1429, which removes exemptions for several regulated professions from the Consumer Protection Act, was one of the more significant law-related measures to pass the Legislature this year.

He predicts it will be "disruptive in the short run" for attorneys who face litigation from disgruntled clients and said it spawns uncertainty about insurance coverage. Ultimately, Saturley believes, the Consumer Protection Act will be resorted to only in those cases he believes it was intended to cover – incidents in which intentional misrepresentation occurred, as in "bait-and-switch" cases or fraudulent transactions. "I don’t think that [the act] was directed at the core reasons why people become angry at professionals – clients typically litigate because they believe someone has acted carelessly and it has caused them harm, not because the clients believe they were deliberately misled."

But for now, attorneys – and other professionals, including accountants, doctors and realtors – may face lawsuits in which clients are likely to allege that intentional deception or misleading behavior was involved. Such claims, if successful, open the door to punitive damages that could double or treble damage awards. One of the nagging questions will be whether professional liability insurance will cover such claims. Saturley said insurance companies will probably soon issue notices to their policyholders that their coverage won’t extend to punitive damages or "intentional bad acts." On the other hand, Saturley said, many plaintiffs’ attorneys may avoid language referring to the CPA because they want to craft complaints that will result in settlements that can be paid by insurance, rather than taking the more difficult route of going after the personal assets of the defendants.

Charles Dibble, of Contoocook, a plaintiffs’ attorney who was an unsuccessful appellant in a case that attempted to extend the CPA to lawyers, Averill v. Cox, has a different concern. In a letter to Bar News (appearing on page 4), Dibble wrote that the language of the act still provides "blanket exemptions" for transactions by certain professionals, which exempt them from the provisions of the CPA despite the fact that such actions were "unauthorized and inappropriate." Under the new legislation, transactions regulated in the banking, securities, and insurance industries are still exempt from the CPA. Dibble asks: "Are lawyers, and numerous other professionals, still exempt in their entirety because some of their ‘transactions’ are ‘subject to the jurisdiction’ of various regulators – for example, trust accounts under the bank commissioner, formation of corporations and stock issuance under the director of securities, representing insurance companies under the insurance commissioner, appearing before the public utilities commission, etc.?"

Saturley said that is indeed one of many questions that may arise as the act’s extension to regulated professionals who were previously exempt – including accountants, physicians and other health providers, as well as lawyers – are worked out through court interpretations.

The NHBA Board of Governors at its May 16 meeting discussed the potential impact on the legal profession of the Consumer Protection Act change. A task force, chaired by NHBA Vice President Russell Hilliard, was formed to further discuss and advise the Bar on the ramifications of the modified law.

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