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    Thieving attorneys vex judge

    http://www.cleveland.com/news/plaind...130.xml&coll=2

    Insurers say solution costs more than crime

    Sunday, January 14, 2007

    Reginald Fields
    Plain Dealer Bureau

    Columbus- A small number of attorneys hired to negotiate settlements with insurance companies have ripped off their clients for nearly $1 million over the past five years, according to the Ohio Supreme Court.

    Chief Justice Thomas Moyer wants to stop the thievery, and he's appealing directly to hundreds of insurance companies to do something about it.

    But Moyer's solution would cost the companies - and their customers - more than the lawyers have stolen, an industry official said.

    Moyer has been pushing to get a state law or an industry regulation requiring companies to notify not just the attorneys as is currently done, but clients, too, when an injury settlement is reached.

    "If we could convince the insurance companies to simply notify the client that a settlement check has been sent to their lawyer," Moyer said, "that would reduce the number of situations in which dishonest lawyers are cheating their clients."

    The list of thieving lawyers - who are now disbarred, had law licenses suspended or served jail time - includes Cuyahoga County's Michael Dadisman, according to the court's attorney discipline board. He took $39,000 from a client.

    Another was Lorain County's Michael Ross, in 2004 for taking $50,000, and Summit County's Edward DiGiantonio, in 2004 for keeping a total of $63,000 in settlement cash from two clients.

    After being rebuffed by lawmakers and industry officials starting in 2001 when he first pushed hard for the change, Moyer in December took up the cause again, this time going to the companies.

    In a letter to more than 600 insurance companies doing casualty business in Ohio, Moyer notes that 11 other states already have a dual notification system. He writes: "I request that you voluntarily adopt the practice."

    He also notes that notifying both entities could also legally protect the insurance companies, though Moyer said in an interview there is no case law specifically on this issue.

    It is unusual for the highest sitting judge in the state to instigate a legislative policy debate. But Moyer says if he recognizes a dishonorable pattern in the law profession, "that's where I get engaged in policy."

    So far, Moyer's clout hasn't yielded any takers, a court spokesman said, aside from a few companies that said they were already notifying clients. But the chief isn't giving up.

    He does have support from the Ohio Academy of Trial Lawyers, who note that the number of crooked attorneys stealing settlement money is tiny compared to the number of those practicing in Ohio but is a significant issue for the profession.

    "It's a small number of lawyers that are giving us a bad name," said Joy Malek Oldfield, an Akron attorney and the academy's insurance law chairwoman. "But while these losses do not affect many people, the losses themselves can be staggering."

    Indeed, there have been just 43 cases of settlement theft committed by 22 attorneys since 2002, according to the Supreme Court's Clients' Security Fund Board of Commissioners.

    But the $971,000 in award money the fund has paid to victims for their losses during that period proves settlement theft has emerged as a lucrative scam among dishonest attorneys.

    The fund was established in 1985 to help victims recoup some of their losses once a disciplinary board has found an attorney guilty of stealing from the client. Most reimbursements from the fund are for unearned legal fees. The fund is bankrolled by annual attorney registration fees.

    The Ohio Insurance Institute, a lobbying group representing most of the property and casualty insurance companies doing business in Ohio, has blocked Moyer from getting anywhere with his proposal.

    The institute said the added regulation could shift liability for unscrupulous attorneys to the insurance companies. Allstate Insurance agrees.

    "I question if this is something for the trial bar to manage instead of the insurance companies," said Tom Clarkson, Allstate's field vice president. He adds his industry shouldn't have to worry whether letters are sent to correct addresses or have to shake liability questions by proving a client was notified.

    The institute estimates the cost for the industry to comply with Moyer's solution would be more than $650,000 a year - roughly triple what settlement thefts cost the court's fund annually. The cost would be for postage, paper and additional manpower needed to produce the extra notifications.

    "When you look at the magnitude of the issue and what you are asking an entire industry to encumber, it doesn't seem like a new mandate is the answer," said Dean Fadel, vice president of governmental affairs for the institute.

    "What happens if the person moved, and they didn't get the notice?" Fadel asked. "Does the insurance company become liable for the theft of the settlement?"

    Fadel added that many of the 11 states with a dual notification system also have higher auto insurance premiums than Ohio, suggesting the cost for the added requirement is passed on to customers in one form or another.

    Moyer said he doesn't agree with either argument raised by the institute and hopes eventually to be able to bypass it altogether to get what he wants.

    "When we have a good response to the letter, then we'll decide whether to approach legislators again," said Moyer, who noted that a bevy of recently elected legislators are starting work at the Statehouse and a newly appointed state insurance director is coming aboard.

    To reach this Plain Dealer reporter:

    rfields@plaind.com, 1-800-228-8272


    2007 The Plain Dealer
    2007 cleveland.com All Rights Reserved.
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  2. #2
    BEB
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    Typical path of least resistance thinking. Even if it is cheaper to let the cheats get away with it today, it won't be tomorrow and it never was the right thing to do.

    That's what you get from people who live and die by this quarter's profit reports.

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    Quote Originally Posted by BugEyedBeast View Post
    That's what you get from people who live and die by this quarter's profit reports.
    too true
    SURGEON GENERAL'S WARNING:
    Lead is very hazardous to your health.
    Always include Kevlar in your daily diet.


    "I always believe in being prepared, even when I'm dressed in white tie and tails."
    - Gen. George S. Patton, Jr.

 

 

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