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Senate passes anti-indemnification clause bill

February 7, 2017

The Indiana House of Representatives will soon consider a bill that, if passed, would prohibit attorneys from including malpractice indemnification clauses in their attorney-client agreements.

Members of the Indiana Senate passed Senate Bill 84 with a 45-3 vote Monday. The bill, authored by Sen. Liz Brown, R-Fort Wayne, would hold that indemnification clauses are against public policy, void and unenforceable.  

“Senate Bill 84 is a simple bill that just applies the same rule of law to the practice of law as it does to any other professional group in the state of Indiana,” Brown told her colleague on the Senate floor Monday.

Brown, who is the owner of Brown Mediation LLC and is licensed to practice law in three states, said she was prompted to author the indemnification bill after learning that Barnes & Thornburg LLP asked clients to sign a release agreement containing a provision that read, “The (parties) hereby release and forever discharge B&T…from any and all claims, of any nature, known or unknown, which the (parties) now have, have had, or may later claim to have arising from or related to any aspect of B&T’s representation of the (parties) relating in any way to the lawsuits.”

The Marion Superior Court granted summary judgment in favor of Barnes & Thornburg on malpractice and fraud claims based on that clause. On appeal, Indiana Court of Appeals Judge Terry Crone agreed, but questioned “the wisdom of allowing attorneys to prospectively insulate themselves from liability for future acts of legal malpractice.”

Democratic Sens. Lonnie Randolph and Greg Taylor and Republican Sen. Aaron Freeman each voted against SB 84. The bill will now advance to the House for consideration.
 

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