GR 9 COVER SHEET DRAFT

Suggested Amendment

Admission and Practice Rule 26 Submitted by Equal Justice Washington

A.   Name of Proponent:

Equal Justice Washington

P.O. Box 25061

Federal Way, WA 98093 (Email: equaljusticewa@gmail.com)

B.   Spokespersons:

Kevin Whatley

C.   Purpose:

In Washington State, it's not a requirement to carry malpractice insurance to be a licensed attorney representing the public. Although the majority of attorneys are responsible and carry malpractice insurance, approximately 14% or 2,752 attorneys in private practice do not. Solo and small firm practitioners represent the largest group, with an astonishing 28% of solo practitioners choosing not to carry malpractice insurance, and yet they pose the greatest risk to the public, the legal system and access to justice. According to the Office of Dispensary Council (ODC), solo and small firm practitioners represent the largest group of disciplined attorneys and the highest rate of complaints to the ODC.

To put it into perspective, with so many uninsured attorneys, the sheer number of clients exposed without basic public protection is staggering. In a 12 month period, at just one client a month or 12 clients a year, that number is 33,024 clients exposed to potential harm. These numbers are conservative at best; most attorneys handle more than 1 client a month, and with just 2 or 3 a month that number rapidly approaches 60,000-100,000.

Currently, only two states in the union have been progressive and strong enough to protect the public and make mandatory malpractice insurance a requirement to practice law. Oregon was the first in 1977, and just recently Idaho did in 2018. Traditionally, the American legal and judiciary system has always been one of the world's leaders, but in this area, the rest of the world has surpassed us. The vast majority of all common and civil law countries require malpractice insurance. All Australian States, Canada, the majority of the European Union, and several countries in Asia require malpractice insurance. It should also be noted that the minimums in these countries range from one to two million dollars, far more than what is being proposed here today. In this area it is clear: the rest of the world is far more progressive than we are when it comes to basic public protection systems.

What we know about the nature of malpractice and its victims:

On September 28th, 2017, the Washington State Bar Association (WSBA) Board of Governors adopted a charter for the Mandatory Malpractice Insurance Task Force. Its mandate was to focus on the nature and consequences of uninsured lawyers, examine current malpractice insurance systems, and gather information and comments from the WSBA members and other interested parties. In addition, it was to develop a working model for how to move forward in Washington State with a basic protection system—a draft rule, the same rule that is before you today. So why is the Mandatory Malpractice Insurance Task Force draft rule not being proposed by the WSBA Board of Governors (BOG) even though the Task Force unanimously decided to recommend, adopt and propose the draft rule to the Supreme Court?

This is a great question, and the answer is completely germane to the Task Force findings and what we know about the nature of malpractice and its victims. Let’s examine its key takeaways:

1.               “The Board of Governors should recommend, and the Washington Supreme Court should adopt, a rule mandating continuous, uninterrupted malpractice insurance for actively-licensed lawyers engaged in the private practice of law, with specified exemptions.”

2.               “Lack of malpractice insurance is, fundamentally, an access-to-justice issue, and the Task Force has concluded that it is more than appropriate for lawyers to ensure their own financial accountability.”

3.               “The Board of Governors’ decision whether to recommend action on uninsured lawyers, and the Court's ultimate decision on this matter, must be approached overwhelmingly from the perspective of what is good for the public and what is good for clients—not what might be convenient or desirable for lawyers themselves.”

4.               “A license to practice law is a privilege, and no lawyer is immune from mistakes. The members emphasized that a key goal of the Task Force is to recommend effective ways to ensure the clients are compensated when lawyers make mistakes. Because 14% of Washington lawyers are in private practice and do not carry malpractice insurance, the Task Force members determine that those lawyers pose a significant risk to their clients.”

5.               “Protection of the public is the overriding public duty of lawyers, the WSBA and the Washington Supreme Court. The WSBA’s mission statement list four core missions: to serve the public, to serve the members of the Bar, to ensure the integrity of the legal profession, and to champion justice. Three out of those four goals emphasize the public mission of the organized bar.”

6.               “Equally if not more important is the language of the Washington Supreme Court's GR 12. GR 12.1 begins: ‘Legal services providers must be regulated in the public interest.” GR 12.1 Then list 10 specific objectives, leading off with “protection of the public” and proceeded to list nine other regulatory objectives, all of which are orientated toward the protection of clients and access to justice.”

7.               “Ultimately, the task force concluded that when one weighs the apprehensions of those who resist malpractice insurance against the large number of clients who are exposed to harm by uninsured lawyers, the balance tips in favor of client protection.”

8.               “Uninsured lawyers create an access-to-justice problem: their clients are typically unable to pursue legitimate malpractice claims against them because plaintiffs’ lawyers cannot afford to bring action against uninsured practitioners.”

In answering the question as to why the mandatory malpractice draft rule is not being proposed by the WSBA Board of Governors and instead being advanced by victims of malpractice, let's examine Professor Susan Sabb Fortney from Texas A&M University and the conclusions from her legal research paper, Mandatory Legal Malpractice Insurance: Exposing Lawyers’ Blind Spots.

“Given the compelling arguments in favor of insurance and the fact that the majority of lawyers in private practice carry insurance, the question is why more states have not mandated insurance for lawyers in private practice have. One explanation may be that lawyers and decision makers may be suffering from ethical blind spots on both the individual and

organizational levels. Findings from the burgeoning field of behavioral ethics provide insights on how the lawyers and judges may not clearly see the ethical dimensions of conduct and decisions

related to malpractice insurance.”

“We all make mistakes. We are distinguished as professionals by the manner in which we handle mistakes and treat those we injure. If members of the bar refuse to see or recognize their

responsibility to injured persons and the profession, it is the role of the insured lawyers to advocate for malpractice insurance to help uphold the high standards of the legal profession. If lawyers refuse to deal with their blind spots and see the ethical dimensions of financial accountability, we do not deserve to be members of a protected profession.”

“Ethical blindness also comes into play at the organizational level, when peers and

organizational leaders fail to accurately assess the unethical behavior of individuals. In the context of lawyering this can occur within firms and bar groups when other lawyers ignore unethical conduct of individuals.”

These ethical blind spots were clearly on display at the BOG’s meeting in Yakima in May 2019. When they voted not to recommend the draft rule to the Supreme Court, one governor stated, “I oppose anything that's mandatory,” while another said, “We should drop this issue entirely. I think we do our members a huge, huge disservice by continuing this dialogue in the face of the overwhelming opposition we have heard.” While another governor publicly tweeted, “Access to justice concerns convinced me to vote no.” This is the complete opposite of the Task Force findings.

Still more troubling, a day after receiving OPMA training from the Office of The Attorney General, a governor lobbied the president of the WSBA BOG and tried to stop the only member of the public, and a victim of malpractice, from speaking to advocate for public protection, saying it was “inappropriate.”

The findings of the Task Force are unanimous, crystal, and unambiguous. This is the most important public protection issue that has most likely ever come before the BOG, protecting all the people of Washington equally and affecting all attorneys equally. It’s fair and responsible. The Supreme Court has already suspended the BOG from making any WSBA bylaw changes. The BOG has now demonstrated it is simply incapable of discharging its prima facie duty to protect and serve the public first and uphold the missions of both the WSBA and the Supreme Court. Full suspension should be considered with the executive leadership of the WSBA reporting directly to the Supreme Court until the Court can thoroughly review the governance structure and be inclusive of multiple public members on the BOG. This action is warranted and justified for the administration of justice, public protection, and promulgating the missions of the WSBA and the Supreme Court.

Conflicts Resolved:

1.    Antitrust exposure: Currently, there are just over 850 Limited Practice Officers and Limited Licensed Legal Technicians practicing in the state of Washington. As their name states, they are limited in the practice area of the law and are limited in legal services afforded to clients. They are deemed legal professionals of a lesser degree, and yet by APR rules 12 (F)(2) and 28 (I)(2) they are compelled to be financially responsible and carry professional liability insurance as a requirement to practice compared to attorneys, who are legal professionals of a higher degree, and are not required to carry insurance and be financially responsible.

Clearly this actively creates an enormous anti-competitive environment and opens the WSBA and the Supreme Court to a high degree of antitrust exposure. This of course is easily resolved by requiring all licensed professionals and providers to carry insurance, which allows for a level playing field while fostering marketplace competition, consumer confidence and most importantly public protection.

2.    Access-to-justice issue: As the Task Force has repeatedly stated, the lack of malpractice insurance is fundamentally an access-to-justice issue. When clients seek attorneys for help, they have already been harmed and look to the courts for relief. When that same attorney victimizes their clients, they are harmed a second time, and when they are unable to pursue legitimate malpractice claims, they are harmed for the third time. Additionally, we know that access-to-justice issues disproportionately affect low-income households and people of color. Seven in ten low-income households face legal issues, and the number of issues per household has tripled from 3 to 9 since 2003.

3.    Ethical blind spot, a GR-12 problem: As Professor Susan Sabb Fortney has concluded and the actions and comments from the BOG have confirmed, ethical blind spots do exist and are dangerous to the public, administration and access-to-justice. Failure to recognize these ethical blind spots puts the Supreme Court in direct conflict with GR-12. GR 12.1, legal professionals must be regulated and it must be for the protection of the public.

Rationale, a Clear Argument for Protection:

There are two options: A. Adopt the draft rule, a proactive approach; or B. Reject the draft rule, a do-nothing approach.

The clean solution is one that resolves all three conflicts and upholds GR-12. GR 12.1 promotes the administration and access-to-justice so everyone can be seen equally under the law.

To arrive at a conclusion, one needs only to take a simple utilitarian approach: the greatest amount of good for the greatest number of people. Option A. favors the over 7.5 million people of Washington State.

Option B. favors the over 2,752 uninsured attorneys in Washington State. We can now make this logical substitution with the following statement:

Option A. resolves all three conflicts, upholds GR-12. GR 12.1 promotes the administration and access-to-justice so everyone can be seen equally under the law.

Option B. resolves all three conflicts, upholds GR-12. GR 12.1 promotes the administration and access-to-justice so everyone can be seen equally under the law.

It’s clear that Option A. offers a true premise and a true conclusion while Option B. is simply false.

D.   Hearing:

A hearing is not recommended.

E.    Expedited Consideration:

Given the fact that there are over 2,752 attorneys uninsured, knowing that there are tens of thousands of exposed clients, and that there is a legal blind spot when it comes to malpractice insurance, having plenary authority and being plainly responsible, expedited consideration is requested and fully warranted. The Supreme Court has the power to act and the power to protect and that is precisely why GR-9 Clause E is relevant and should be fully exercised. On behalf of the 7.5 million people of Washington State, victims of malpractice and Equal Justice Washington, we pray for relief.

F.    Supporting Material:

Amended APR-26 Draft Rule

Pages 1-10    Arguments for malpractice insurance from Professor Susan Sabb Fortney’s legal research paper, Mandatory Legal Malpractice Insurance: Exposing Lawyers’ Blind Spots.

Pages 11-13 Conclusions for malpractice insurance from Professor Susan Sabb Fortney’s legal research paper, Mandatory Legal Malpractice Insurance: Exposing Lawyers’ Blind Spots.

Pages 13-24  WSBA Mandatory Malpractice Insurance Task Force Recommendations and Conclusions.