National Insurance Industry Trade Organizations Register Concerns Over Florida Bar Opinion On Unlicensed Practice of Law
Oct 7, 2014
Above: Lawyers Maria Elena Abate and Wes Strickland co-filed comments with the Florida Supreme Court last week on behalf of four major insurance trade associations.
Four insurance industry trade organizations–three of them national in scope–submitted comments to the Florida Supreme Court last week on a Proposed Advisory Opinion (“PAO”) they believe could be misconstrued to inhibit the everyday functions of insurance adjusters, risk managers, insurance company staff counsel and third-party administrators.
Filed on October 2, 2014, the insurer comments relating to the case of Scharrer v. Fundamental Administrative Service were prepared jointly by Maria Elena Abate and Wes Strickland of Colodny Fass& Webb, together with Susan Kelsey of the Kelsey Appellate Law Firm on behalf of the Property Casualty Insurers Association of America, the Florida Insurance Council, American Insurance Association and the National Association of Mutual Insurance Companies.
The insurance industry comments are attached for review.
After its dismissal in court, the underlying case involving a claim for damages based on the unlicensed practice of law was subsequently the subject of a May 2, 2014 Florida Bar (“Bar”) public hearing, after which the PAO was issued by the Bar’s Standing Committee on the Unlicensed Practice of Law (“Committee”).
The PAO found that it does not constitute the unlicensed practice of law for a non-lawyer company or its in-house counsel who is not licensed to practice law in Florida to control, direct and manage Florida litigation on behalf of a non-lawyer company’s third party customers when the control, direction and management is directed to a member of The Florida Bar who is representing the customer in litigation.
While the PAO generally stated that the conduct at issue in Scharrer did not represent the unlicensed practice of law, it suggested that there are circumstances where the activity of the non-lawyer company or its in-house counsel could constitute the unlicensed practice of law depending on the level of involvement of the Florida lawyer. Consequently, according to the PAO, whether a practice is “unlicensed” is dependent on the facts and circumstances of the case.
Click here to view the PAO.
In their comments to the Florida Supreme Court last week, the insurance associations requested that certain language included in the PAO be stricken because it goes beyond the scope of the issue at hand by suggesting that, in some cases, the type of control described might be so extensive as to constitute the unauthorized practice of law. The comments noted that such an inquiry was inappropriate where a Florida licensed lawyer was involved and that, because the PAO left such matters open to speculation, it could be subject to mischaracterization and lead to unintended consequences.
The insurance trade comments outline certain circumstances under which the PAO could be misconstrued to needlessly create confusion, such as:
- The authorized use of non-lawyers and third parties in insurance matters
- Insurance company legal departments and in-house counsel activities
- Claims management by third-party administrators, managing general agents and claims adjusters
- Insurers and third-party administrators providing a defense in third-party litigation
Pursuant to Bar rules, the comments fall within a 30-day period, which is currently underway as the Florida Supreme Court considers the PAO for adoption in the matter.
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