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Attorney E-Newsletter

January 2006

Supreme Court Requires Disclosure Of Lack Of Malpractice Coverage

On December 30, 2005, the Supreme Court of Pennsylvania adopted new Rule 1.4(c) of the Pennsylvania Rules of Professional Conduct, which requires a lawyer who does not have professional liability insurance coverage to disclose this fact to clients in writing.

The rule states that a lawyer in private practice must inform a new client in writing if the lawyer does not have professional liability insurance of at least $100,000 per occurrence and $300,000 in the aggregate per year, subject to commercially reasonable deductibles, retention or co-insurance. Also, a lawyer must inform existing clients in writing at any time if the lawyer's professional liability insurance drops below either of those amounts or the lawyer's professional liability insurance is terminated.

Lawyers and firms who do have the levels of insurance specified in the rule are not required to make any disclosure. The requirement does not apply to lawyers who are employed full-time as government or corporate attorneys, or to lawyers who do not have private clients.

The comments to the rule include suggested language for disclosure when required. Deductibles, retentions or co-insurance offered from time to time in the marketplace for professional liability insurance for the size of firm and coverage limits purchased will be deemed to be commercially reasonable.

The rule change is effective July 1, 2006. The effective date of the requirement was set six months in the future in order to afford lawyers who do not have insurance an opportunity to acquire coverage.

The full text of the amended rule may be downloaded as a PDF.

Supreme Court Holds That False Statements In Bar Application Warrant Disbarment

In a decision handed down December 30, 2005, the Supreme Court of Pennsylvania held that a lawyer who failed to reveal in his New Jersey and Pennsylvania bar applications that he had been subject to discipline in his prior occupation as a doctor, and misrepresented his employment history, would be disbarred despite evidence that his judgment was affected by a number of psychiatric conditions.

In the case of Office of Disciplinary Counsel v. Akim Frederic Czmus, the majority opinion, written by Justice Eakin, found that Czmus had engaged in a twenty-year pattern of deceit across two professions, and concluded, "this Court will not reward respondent with the presumption of reinstatement after five years since his admittance to the bar was predicated on fraudulent precepts in the first instance. Only disbarment, which places a higher burden on respondent if he should seek readmittance, will properly protect the goals of the profession and require respondent to be totally candid to the reviewing tribunal before his readmittance will be considered."

A concurring and dissenting opinion, written by Justice Newman and joined by Justices Castille and Baer, concurred with the disbarment but recommended going further and revoking Czmus's admission to the practice of law, requiring him to begin the admissions process from the beginning.

The majority opinion and the concurring and dissenting opinion may be downloaded as a PDF.

Tip Of The Month

As a new year begins, the temptation to say "Out with the old!" and dispose of old papers and documents is strong. The question of how long to keep files and documents is sometimes a vexing one for lawyers. Pennsylvania Bar Association Formal Opinion 99-120 provides excellent guidance for lawyers on file retention (available online in PDF format). The Rules of Professional Conduct also set certain time requirements for records which must be kept:

  • Notice of lack of malpractice coverage - 6 years [RPC 1.4(c), effective 7/1/2006]
  • Records of transactions involving client property - 5 years after disposition of the property or termination of the client-lawyer relationship, whichever is later [RPC 1.15(a)]
  • Copies or recordings of advertisements - 2 years [RPC 7.2(b)]