Paperwork squabble threatens bill to protect lawyers' clients
In 2019, when Portland attorney Lori Deveny was indicted for allegedly stealing millions of dollars from her clients, it was just the latest instance in which an Oregon lawyer was accused of improperly diverting settlement cash into their own pocket.
Now, a consumer protection bill designed to curb the unsavory practice faces an uncertain future despite strong support from the Oregon State Bar, the quasi-governmental organization that regulates lawyers.
The bill's premise is simple. It requires that when an insurer pays a settlement to a client's lawyer, it alerts the client it has done so.
The organization representing state supreme courts, called the National Conference of Chief Justices, supports the idea. And 15 states have adopted the safeguard already.
In Oregon, however, Senate Bill 180 has sparked disagreement despite ostensible support from every political stakeholder involved.
The powerful Oregon Trial Lawyers Association, the group whose members would be most affected by the bill, maintains that it supports it.
But the group wants the legislation changed so that the state would be required to craft a standardized form that every insurer would have to use, to prevent "editorializing" or misinformation by insurers — another influential group.
"All we're aiming for is clarity for the consumers," said Arthur Towers, OTLA's lobbyist.
Adding a form, however, is likely to add a price tag for the state if the bill passes, at a time when lawmakers are skeptical of new costs.
The need to track assorted state-specific paperwork could also could be a deal-breaker for larger insurers, according to Denni Ritter, a government affairs official for the American Property Casualty Insurance Association, whose members helped the State Bar craft the bill.
"I would think there would be a few (insurers) who would have some serious qualms" about an Oregon-only form, Ritter said.
The bill, which received a public hearing before the Senate Judiciary Committe on March 9, has been scheduled for a vote on March 25.
Disagreement can poison a bill's chances, however, and it's unclear how the vote will go given the trial lawyers' stated concerns.
Towers said his group "absolutely" supports passage of the bill, but "we want to see what the final version looks like of the bill before we commit."
To address concerns about potential misinformation, the Oregon State Bar has floated an amendment that would require insurers to copy clients' lawyers on any notification.
Alecia Chandler of the National Consumer Protection Organization, a nonprofit focused on safeguards for legal clients that supports the bill, said squabbling over details should not be allowed to kill it.
"It's just a handful of lawyers a year, but the damage that's done to these poor people is so astronomical, sometimes," Chandler said. "The bill is important."
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