Texas Supreme Court Nixes Mandatory Disclosure of Professional Liability Insurance

The Texas Supreme Court has decided against a proposal that would require attorneys in the state to disclose whether they have professional liability insurance, according to an April 16 news release from the court. In an April 14 letter, Supreme Court Chief Justice Wallace Jefferson notified State Bar of Texas president Roland Johnson of the court’s decision against mandatory disclosure. The news release provided a link to the letter in which Jefferson wrote: “Of course, we should be concerned if clients are unable to recoup sums occasioned by lawyer malpractice, or if the public would view the non-existence of such insurance a critical factor in the decision to retain a lawyer. But, as your process demonstrated, there is little evidence of either circumstance." In 2007, the Supreme Court asked the State Bar to consider looking at the insurance disclosure issue after Jefferson received a letter from Charles “Chuck” Herring Jr., a partner in Austin’s Herring & Irwin, suggesting that a study be done. Gib Walton, State Bar president at the time, appointed a task force to do the study. A telephone poll conducted by the Bar in 2008 showed 70.4 percent of the 500 Texas residents surveyed said lawyers should disclose whether they carry the insurance. However, the task force voted 6-5 in May 2008 against requiring disclosure, and the State Bar board of directors took no position on the issue the following month. Then the Supreme Court-appointed Grievance Oversight Committee studied the issue, recommending in a June 2009 report that the court adopt a rule requiring lawyers who do not have insurance to disclose their lack of coverage. The Supreme Court asked the State Bar to take another look at the issue in June 2009. The State Bar conducted seven public hearings around the state in the fall of 2009 and presented pro and con arguments on the issue to focus groups. On Jan. 29, the Bar board voted 39-1 against recommending a disclosure rule. Herring says he is not surprised by the Supreme Court’s decision in light of the Bar board’s vote. “But I am assuming the issue is likely to surface in the next legislative session, and I think it’s unfortunate to allow the [Texas] Legislature to undertake rule-making,” Herring says.
-- Mary Alice Robbins