As a busy professional with limited time, one of the last things you want to receive is an official letter from your licensing board or agency about a complaint that has been filed against you. To make matters worse, hiring experienced counsel to represent you in such a matter may be important but is almost certainly an unanticipated expense. Fortunately, coverage for such representation from professional liability carriers has become increasingly common in recent years. One of the first things you should do if you receive such a disciplinary or ethics complaint is to check your professional liability insurance policy and determine if you have coverage.
Historically, liability carriers for physicians, dentists, therapists and other medical professionals have been more likely to contain coverage for representation in disciplinary proceedings than insurers for other professionals. Increasingly, professional liability carriers for attorneys and other professionals have begun offering such coverage. Some of these carriers pay the attorney directly and others provide reimbursement coverage, which requires the professional to pay the attorney first and then seek reimbursement from the carrier, typically up to a certain limit. The amount of coverage can vary significantly, typically in a range from $5,000-$25,000, and generally it has no deductible, unlike malpractice coverage. Most carriers allow the professional to select the attorney of their choice.
As an example, Lawyers Mutual Liability Insurance Company of North Carolina (LML NC) insures a large number of attorneys in this state. It recently has amended its policy to include several additional benefits that do not trigger the insured’s deductible amount, including reimbursement coverage in disciplinary proceedings. This provision is being incorporated into new policies or upon renewal of existing policies. Under the amended policy, LML NC will reimburse its insured for legal fees paid to an attorney representing the insured as a result of a disciplinary proceeding.
Generally, to trigger such reimbursement coverage, the disciplinary proceeding must be:
(a) related to the provision of legal services on or after the prior acts date of the insured in the policy (generally excluding acts prior to coverage with LML NC); and
(b) first initiated against the insured and reported to LML NC during the policy period or any extended reporting period (“tail” coverage).
Reimbursement coverage is excluded in the following situations:
1. the insured has been convicted of a felony for conduct giving rise to a disciplinary proceeding; or
2. the proceeding results in discipline of the insured because of theft, embezzlement, misappropriation, or other unauthorized withdrawal or misapplication of funds.
If coverage is provided under the conditions in sections a and b and is not excluded under 1 and 2 above, LML NC will reimburse the insured up to $5000 per policy period. This is an excellent additional benefit now being provided for the first time to many lawyers in North Carolina. For many grievances with the State Bar that are not overly complex or document intensive, the reimbursement amount will cover representation by an experienced attorney at that informal stage.
This reimbursement coverage, however, likely would only cover a small portion of a case referred to the Disciplinary Hearing Commission for a formal evidentiary hearing. It is yet another reason why it’s important to seek representation by counsel experienced with State Bar matters at the early and informal stages of the proceedings. Most all of us know the expression that a lawyer who represents himself or herself has a fool for a client. While that may be an overstatement, it is difficult to be objective in representing yourself while being attacked, often by a client that you have gone out of your way to help.
One of the great aspects of LML NC is that its in-house counsel are very proactive about early intervention and pre-suit, claims repair assistance before the problem gets out of control if contacted early by an insured. Our firm has a similar philosophy about grievance or disciplinary matters and highly recommends that lawyers and other professionals get assistance and representation as early in the process as possible. For more information about the grievance process and whether you need to retain counsel, review http://brockerlawfirm.com/state-bar/grievance/. Regardless of your profession, if you receive an ethics or disciplinary complaint, first check your professional liability policy for coverage and then seriously consider retaining an attorney experienced in handling such matters. For more information, review http://brockerlawfirm.com/general-board-process/overview/ . If you have coverage now, take advantage of it and don’t have a fool for a client.