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Reading Eagle, Pa., Don Spatz Column
Reading Eagle - March 24, 2004

By: Don Spatz

Pennsylvania lawyers are bewailing the state Senate's recent vote to get started on a constitutional amendment that would lead to capping medical-malpractice awards.

The caps would take away the rights of victims and let businesses off the hook for defective products, Pennsylvania Trial Lawyer Association President Richard J. Schuber lamented.

Caps can be argued either way, but before lawyers fault them, they'd do better to get rid of their own caps -- the ones limiting how much reimbursement their clients get when lawyers steal their money.

Since 1982, lawyers have paid in to what's now called the Pennsylvania Lawyers Fund for Client Security, created by the state Supreme Court and claiming its primary function is to reimburse clients when lawyers misappropriate their money.

But it has a cap of $75,000 per claim. Even if you can prove your lawyer stole $200,000 from you, you're out of luck. There's a cap.

Take a look at the fund's 2001-2002 fiscal year. At the beginning, records show, it had 69 pending claims against 52 attorneys accused of stealing a total of $6.8 million from clients.

But the fund noted that even if all the claims were proved, it would pay only $1.2 million because of the $75,000-per-claim cap. Eight people had claims that totaled more than $5 million above the cap.

I haven't heard lawyers worry about caps taking away those victims' rights.

The fund got 197 new claims that year, and disposed of 138. Its report did not say how much was not paid because of the cap.

However, by the end of the year, the fund still had 128 pending claims against lawyers, saying they stole a little over $8 million. But it said that cap would limit its payouts to no more than $3.1 million even if the claims were proved. Twenty-two people had nearly $5 million in claims above the cap.

The fund reported that of the money it did pay, 58 percent was for theft from estate, trust and escrow accounts; 21 percent was for theft from lawsuit settlements; and 13 percent was for loan and investment fraud.

Perhaps that cap is there because, without it, the lawyers' premiums would rise. After all, lawyers already were paying a whopping $ 45 each year into the fund.

Now, that client fund has no jurisdiction over malpractice or negligence claims, which are handled separately as court cases. And lawyer discipline is handled by the Disciplinary Board of the Supreme Court of Pennsylvania.

Lawyer discipline is relevant here, since lawyers claim that if doctors disciplined their own ranks better, there would be no malpractice problem.

Whether that's correct can be debated by reasonable people.

But lawyers may not be the best group to make the case, for a Washington-based consumer group, HALT Inc., last year listed Pennsylvania's lawyer discipline system as the worst in the nation.

HALT, the nation's largest and oldest legal-reform group, decried most states' lawyer-discipline systems for what it called a pattern of toothless sanctions, unnecessary secrecy, biased procedures and endless delays.

This column has said before that solving Pennsylvania's medical-malpractice crisis will take a lot of work by many groups, primary among them doctors, lawyers and insurance companies.

Here's the bottom line: Lawyers are wearing blinders if they ask doctors to do all the work. Lawyers have a lot to offer the debate. But they need to do a little house cleaning of their own.