Wave Maker: A Remedy for Crooked Lawyers

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Wednesday, May 03, 2006

A Remedy for Crooked Lawyers

It is certainly true that there are far fewer crooked lawyers than prevailing opinion might suggest. And perhaps it is my imagination that there seem to be more and more stories about lawyers absconding with their clients' money -- or perhaps it is just that more of them are getting caught.

Certainly, there have been more than enough instances in recent years. And when lawyers who have stolen their clients' funds cannot make full restitution, it falls upon the Clients Security Board to make them whole. Those in charge of the Clients' Security Board seem to be concerned enough about the growing problem that they have proposed a rather simple and effective rule relating to those lawyers who represent claimants in personal injury cases:

When an insurance settlement check is transmitted from an insurer to a claimant's attorney, the claimant receives notification.

Who could possibly object to that? Well, some lawyers.

... the proposal is opposed by some lawyers, who argue that the mere existence of such a rule suggests that lawyers are crooks, and who believe it would let insurance companies interfere with attorney-client relationships.

''It's basically saying you can't trust your lawyer," said Stephen A. Lechter, a executive board member of the Bristol County Bar Association, which opposes the proposal. Lechter called the proposed rule ''offensive."

Is it offensive? Pardon me, counselor, but you need to grow some skin.

Said Edward W. McIntyre, vice president of the Massachusetts Bar Association, ''we have maybe a half-dozen lawyers who steal client funds annually, yet their theft ends up harming the entire bar."

Actually, it's quite a bit more than a half-dozen. According to the records of the Clients Security Board, it has paid more than $310,000 over the past two years in 23 instances in which attorneys stole clients' settlement money. From September 2004 through August 2005, while the board reimbursed $152,046 in stolen settlements, it also refunded $710,833 stolen by lawyers from trusts and estates. In total, the board reimbursed $2.4 million during its last fiscal year.

These so-called "payee notification" laws have been adopted in a growing number of states (eleven now, including New York and California).

The Massachusetts Bar Association has yet to take a position on the proposed rule. I honestly don't know why it would hesitate. There is certainly no serious argument that copying the client on a transmittal letter from an insurance company to his lawyer constitutes "interfering in the lawyer-client relationship."

Posted by: Wave Maker / 8:34 AM/ |