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Bar association speaks out against bill banning prospective liability releases

March 17, 2017

One of the state’s largest bar associations is speaking out against a bill in the Indiana General Assembly that would prohibit attorneys’ ability to prospectively release themselves from malpractice liability.

The Lake County Bar Association announced its opposition to Senate Bill 84, authored by Sen. Liz Brown, R-Fort Wayne, Thursday. Brown’s bill, which passed the full Senate in early February, holds that “Any provision in an agreement between an attorney and a client that purports to prospectively release the attorney from liability for legal malpractice is contrary to public policy, void, and unenforceable.”

Brown said she authored SB 84 after learning of the case of Central Indiana Podiatry, P.C., Northwest Surgery Center, LLC, d/b/a Foot & Ankle Surgery Center, f/k/a Foot & Ankle Surgery Center, LLC and Anthony E. Miller, D.P.M. v. Barnes & Thornburg, LLP, 49A02-1604-PL-498. In that case, the Indiana Court of Appeals affirmed summary judgment in favor of Barnes & Thornburg after the firm was sued in a legal malpractice case.

B&T represented the medical centers and Anthony Miller in a lawsuit filed by a podiatrist, and after B&T’s clients sought a reduction in their legal fees, the firm provided a release agreement and advised the parties to retain independent counsel to review the agreement before B&T would sign it. The release capped the legal fees at $145,000 and contained a provision holding that the parties would “release and forever discharge B&T, and all predecessor and successor firms…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.”

“I just didn’t think that was really possible, and I wanted to make sure going forward that we didn’t do that,” Brown said in an earlier interview with the Indiana Lawyer.

The Lake County Bar presented two reasons for its opposition to SB 84. First, the bar association said the bill “runs afoul of the Indiana Rules of Professional Conduct,” specifically rules that require Indiana attorneys to put in writing any agreements that limit the scope of their representation.

“The Indiana Court of Appeals recognized these situations, and specifically permitted attorneys and clients to agree to limit the attorney’s liability when it issued its opinion in Central Indiana Podiatry, P.C. v. Barnes & Thornburg, LLP in 2016,” the bar wrote. “Senate Bill 84 is a legislative attempt to overrule what the courts have already decided.”

But Brown said she has not received any feedback, negative or otherwise, on SB 84 since it passed the Senate on Feb. 6. The senator said she was disappointed the LCBA didn’t share its concerns with her before publicly opposing her proposed legislation. Brown also said she was unclear on how her bill legislation would “run afoul” of Indiana Rules of Professional Conduct.

Under Rule 1.8(h), “A lawyer shall not: make an agreement prospectively limiting the lawyer’s liability to a client for malpractice unless the client is independently represented in making the agreement” and shall not “settle a claim or potential claim for such liability with an unrepresented client or former client unless that person is advised in writing of the desirability of seeking and is given a reasonable opportunity to seek the advice of independent legal counsel… .” Brown said she does not understand the bar’s association reasoning as to how her legislation conflicts with such existing rules.

The bar association also says that SB 84 “limits the public’s access to attorneys in especially difficult situations for the person in the need of (a) lawyer.”

“The harm that Senate Bill 84 causes is that it specifically goes against ethical rules and limits the rights and opportunities of Indiana citizens to obtain an attorney, especially when the citizen is in a very difficult circumstance or lacks the money for unlimited representation,” the bar association wrote.

But Brown likened the situation to Indiana’s Good Samaritan Law and said it would be “disturbing” to think that an attorney offering advice to someone quickly in need of the advice of counsel would want to indemnify themselves because they are not providing the same representation that might be offered “in a more timely, thoughtful manner.”

“You’re looking at the most at-risk population being force to sign this (release) and essentially have no other recourse to counsel,” Brown said. “They have no recourse when they’ve had bad representation, and the consequences for these people, if we’re talking about the criminal setting, could be the most dire. They could go to prison.”

Nissa Ricafort, president of the Indianapolis Bar Association, said IndyBar has not taken a position on SB 84. The latest version of the bill can be read here. It has yet to be scheduled for a hearing in the House Judiciary Committee.

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