May 18, 2006

In response to the persistent problem of lawyers' stealing money owed to their clients, eleven states including New York and California have adopted "payee notification" laws embodying what Peter Morin calls a "rather simple and effective" rule: "When an insurance settlement check is transmitted from an insurer to a claimant's attorney, the claimant receives notification.

"Who could possibly object to that? Well, some lawyers." In Massachusetts, for example, a county bar association has come out against the idea, saying it implies not all lawyers can be trusted and permits that arch-no-no, direct contact between an adversary insurer and their own client without their intermediation.