HLS 11RS-1954 ORIGINAL
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Regular Session, 2011
HOUSE CONCURRENT STUDY REQUEST NO. 6
BY REPRESENTATIVE PEARSON
INSURANCE/LIABILITY: Requests study to review lawyer misconduct relative to
settlements in third party liability insurance claims
A CONCURRENT STUDY REQUEST1
To the House Committee on Insurance and the Senate Committee on Insurance to meet and2
to function as a joint committee to study lawyer misconduct relative to the settlement3
of third-party liability claims, and to report the findings of the joint committee to the4
legislature prior to the convening of the 2012 Regular Session of the Legislature.5
WHEREAS, the Louisiana State Bar Association maintains a Client Assistance Fund6
which exists in order to protect the public by reimbursing, to the extent deemed appropriate7
and subject to a per claim limit of twenty-five thousand dollars, losses caused by the8
dishonest conduct of any licensed Louisiana lawyer practicing in this state; and9
WHEREAS, the Louisiana State Bar Association reports that the number and dollar10
amount of claims reported to the Client Assistance Fund have been on the rise in recent11
years, with some thirty-two claims totaling in excess of one hundred eighty-seven thousand12
dollars in 2009 and some one hundred two claims totaling in excess of four hundred forty13
thousand dollars in 2010; and14
WHEREAS, a significant portion of recent payments by the Client Assistance Fund15
have been related to misappropriation of settlement proceeds by the lawyers whose clients16
were unaware their settlement funds were paid; and17
WHEREAS, the twenty-five thousand dollars cap on damages provided by the fund18
is often not enough to settle a client's claim for loss caused by lawyer misconduct; and19
WHEREAS, in an effort to curtail lawyer misappropriation of settlement funds,20
fifteen states have implemented laws or guidelines, patterned after the American Bar21 HLS 11RS-1954 ORIGINAL
HCSR NO. 6
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Associations's Model Rule, calling for insurers to provide direct written notification to1
claimants of third-party liability settlements; and2
WHEREAS, those states that have adopted settlement payee notification laws have3
generally reported a decline in the number of client protection fund claims based upon4
settlement misappropriation; and5
WHEREAS, Louisiana currently has no requirement that an insurance company6
provide written notice to a claimant when a settlement check is issued and sent to the7
claimant's lawyer or representative.8
THEREFORE, BE IT RESOLVED that the Legislature of Louisiana requests the9
House Committee on Insurance and the Senate Committee on Insurance to meet and to10
function as a joint committee to study lawyer misconduct in the settlement of third-party11
liability claims and to report the findings of the joint committee to the legislature prior to the12
convening of the 2012 Regular Session of the Legislature.13
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Pearson HCSR No. 6
Requests the House Committee on Insurance and the Senate Committee on Insurance to
meet and to function as a joint committee to study lawyer misconduct in the settlement of
third-party liability claims. Also requires a report of the findings of the joint committee to
the legislature prior to the convening of the 2012 R.S.