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The Bar Associations This year two state bar associations have been actively promoting anti- subrogation measures. The two state bars are Ohio and Florida. Generally, we see anti- subrogation activity undertaken in the legislature, not through a state bar association. Although unique in their approach, the bar associations efforts are an attempt to curtail subrogation recoveries. Ohio has been studying anti-subrogation proposals for a few years and continued their efforts in 2010. Florida is new to the arena, having passed an amendment to a Bar Rule in July 2010. The Bar Rule will not become effective until approved by the Florida Supreme Court. Ohio The Ohio State Bar Association (OSBA) took up an anti-subrogation bill on the Friday after last year’s conference in Colorado Springs. The OSBA Board of Governors rejected support of the bill to ban all subrogation or to adopt “made whole” and “common fund” doctrines into statute. However, the OSBA did create a new committee to study subrogation rights and perceived problems with the process in Ohio. This committee was comprised of 4 personal injury attorneys, 4 insurance representatives (2 insurance defense attorneys, 1 insurance regulatory attorney & 1 part time subrogation with insurance defense attorney). The committee has conducted multiple hearings and inquiry into subrogation rights in Ohio. On September 14, 2010 the Committee held a final hearing on the subrogation issue. Daran Kiefer, an attorney with Kreiner & Peters and Chair of the Amicus Committee, testified on behalf of NASP at the hearing. The end result was a split vote, 4 to 4. The Chair reported the Special Committee was unable to reach a decision and concluded their handling. However, other OSBA Committees are still exploring anti- subrogation proposals. Expect to see more from the OSBA on this matter. Florida The Florida Bar Association (FBA) created a special committee to study a rule change to Bar Rule 4-1.5 by adding a new sub section (E) which allows a lawyer to refer out settlement of the subrogation resolution to another firm or attorney to resolve the matter and charge an additional fee. This would result in the injured party paying one fee to their attorney on the entire settlement and then paying a second fee to a new firm to reduce the subrogation claim. The proposed new section (E) provides as follows: “The lawyers shall include in the contract an explanation of the scope of any subrogation or lien resolution services the lawyer will undertake at the conclusion of the primary matter. The lawyer shall not charge additional fees for handling lien resolution services if those additional fees, when combined with the lawyer’s fees for handling the primary claim, would exceed the contingent fee schedule set forth in this subdivision. If extraordinary subrogation or lien resolution services are handled by others outside the primary lawyer’s firm who will charge additional attorney’s fees or costs to the client, these services shall only be provided after obtaining the client’s informed written consent to the additional fees or costs. Any additional fees or costs charged by the other lawyers involved in the subrogation or lien resolution services must separately comply with the provision of Rules 4-1.5(a) through 4-1.5(e), and if the fees are contingent on the outcome of the lien resolution, the lien or subrogation resolution fees on their own must also comply with Rule 4-1.5(f).” The proposed change really provides an incentive for the initial attorney not to settle the subrogation claim. It creates an entire segment of the bar association whose goal it is to reduce or eliminate subrogated interests. This proposed rule changed passed the FBA and is headed to the Supreme Court of Florida for comment. The Rule will not become effective until approved the Florida Supreme Court. On October 15, 2010 the FBA petitioned the Florida Supreme Court to amend Rule 4-1.5 (f). The amendment was included in a petition acknowledging consideration and contemplation by the Florida Supreme Court is required prior to approval.
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