Insurance [updated]

Criminal defense lawyers in Texas are all but immune from liability for malpractice. In Peeler v. Hughes and Luce the Texas Supreme Court held that a convicted defendant’s crime is the sole proximate cause of any injury he suffers as a result of the prosecution; in order to sue a criminal-defense lawyer for negligence, he has to reopen the case and win.

Many criminal-defense lawyers have no liability insurance because they don’t need it. If you know that you most likely will never be sued for malpractice and will most likely win if you are, it makes sense not to spend any money to protect yourself against a possible judgment—especially if paying for the protection makes it more likely that you will be sued. Insurance causes lawsuits. Plaintiffs’ lawyers generally leave potential defendants without deep pockets alone; insurance coverage adds to pocket depth. A lawyer who has malpractice (errors & omissions, or E&O) insurance is more likely to get sued.

Most of us in Texas are judgment-proof, so we don’t need insurance to protect us against an improbable judgment. But what if you look at malpractice insurance as protecting the clients, rather than the lawyer?

“All but immune” is not “immune.” Lawyers make mistakes that hurt people. Even—no, especially lawyers who think they don’t. There have been cases, and will be more, in which convicted defendants have been exonerated. There have been and will be cases—perhaps like that of Brisby Brown, described in Rick Casey’s Chronicle column yesterday—in which innocent defendants have suffered jail time because of their lawyers’ negligence.

If you consider the criminal-defense lawyer’s responsibility not to harm his clients, and to mitigate the harm if he does, then malpractice insurance takes on a new light. It’s right that, in the unlikely even that we make mistakes for which we are liable, we should have the ability to compensate those we’ve harmed.

Voluntarily recompensing someone who has spent 18 undeserved months in jail would bankrupt most people. But malpractice insurance for criminal-defense lawyers in Texas is, because of Peeler v. Hughes and Luce, inexpensive (the insurers take into account the effect of that case). Even if it doesn’t make financial sense to pay much more over the course of a career in insurance than the nothing that insurance is likely to pay out, it makes moral sense to spend a little every year so that those who have trusted us are not, in the worst-case scenario, left out in the cold.

In Texas, you have to have liability insurance (or other proof of financial responsibility) to drive a car: not because you’re likely to have an accident or even because an accident in which you injured someone would bankrupt you, but to protect those that you might injure. Why shouldn’t you have to have liability insurance to practice law?

So much for liability insurance. I think Texas criminal-defense lawyers should have it. [Edit: This is not to say that liability insurance should be mandatory.]

Mandatory liability insurance wasn’t even on the table when the Texas Supreme Court last week rejected a rule requiring lawyers to disclose whether they have malpractice insurance. The State Bar of Texas’s Board had opposed the rule 39-to-1. Overwhelmingly lawyers opposed a rule that would not have required them to carry liability insurance, but only to disclose whether they did or not.

I don’t think the disclosure rule was an important one. At best, it might have helped encourage lawyers to get coverage to keep up with their competitors. It wouldn’t have done the star of Casey’s column, Mr. Brown, a whit of good: he was represented by appointed counsel, and like the rest of his lawyer’s clients couldn’t, if he knew his lawyer was uninsured, have chosen another.

I have never, in nearly 15 years of practice, been asked by a potential client whether I have malpractice insurance. If it were an important thing for clients to know, I think that at least one of the (thousand-plus?) people who have hired me to represent them would have thought to ask it. But potential clients can always ask. And probably should.

12 responses to “Insurance [updated]”

  1. What of having the insurance to cover the potential costs of a malpractice suit? Certainly when you look at the medical field where many cases go to verdict only to come back with a finding of no liability that too could be ruinous.

  2. It could be argued that one of the best defenses against malpractice suits is NOT having liability insurance: it makes it much harder to collect, and fewer lawyers would be willing to “roll the dice.”

    • You mean

      it makes sense not to spend any money to protect yourself against a possible judgment—especially if paying for the protection makes it more likely that you will be sued. Insurance causes lawsuits. Plaintiffs’ lawyers generally leave potential defendants without deep pockets alone; insurance coverage adds to pocket depth.

  3. Do criminal lawyers face the possibility of grievances by clients? Some malpractice insurance policies may cover defense of a grievance which might also be reason to have it particularly because lawyers who are represented in the grievance process by attorneys tend to better than those who are not (this is just anecdotal). But personally, I think that your reason is most compelling.

  4. Don’t be so quick to assume you can’t get sued. Take a look at this case here in New Hampshire: Hilario v. Reardon, 960 A. 2d 337 (2008). We have always had the traditional rule that actual innocence is a requirement for a criminal defendant to sue his lawyer for malpractice. In this case, however, the Court made an exception for *sentencing* related claims. A criminal defendant who acknowledges his guilt can still sue his lawyer for sentencing related errors. This stands to reason. Imagine a situation, for example, where a criminal defendant, because of his lawyer’s negligence, serves more than the statutory maximum. Should he not be allowed to sue for damages? Perhaps your courts will agree if faced with the right example.

    I understand you reasoning that lack of insurance can deter a lawsuit. But unless you’re broke it won’t eliminate the risk. Most lawyers who have been around have at least two assets of some worth that might very well be attractive to plaintiff lawyers: their practice and their home.

    • I agree that the NH rule stands to reason, by the way, but it’s not likely ever to become the law in TX, however, since the Texas Supreme Court is somewhere to the right of Rush Limbaugh.

      • Points well taken. I was noticing that Texas has no homestead exemption limit whereas in N.H. I think the limit is about $50K in equity. So, for example, while I don’t do any med mal I know that it’s not unheard of for plaintiff’s lawyers to go after a doctor’s houses if their insurance is exceeded.

        I guess it’s a different world down there, huh? At least you don’t have to worry about snow tires and moose!

        • Nope, just floods and armadillos. Well, deer too.

          I’m rethinking my endorsement of the NH rule. It may be bad public policy. Therein, I think, lies a post.

  5. Mark: I don’t think I’ve ever been asked by a potential client if I had malpractice insurance. But, the next question is do I want to represent a client who wants to know if I have malpractice insurance?
    Isn’t that a heck of a way to start an attorney-client relationship based on trust.

  6. Great post. Any chance you could briefly explain how to figure out how much coverage to get, assuming I have no assets to protect? I asked an agent and he said that he could not give me advice on this. What sort of costs might be involved with a malpractice suit for a criminal case?

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