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Payee notification back on the table

Virginia State Bar President Irving M. Blank told the agency’s executive committee today that he expects statewide bar groups and the Supreme Court of Virginia to revisit the issue of payee notification soon.

The concept, which has insurers notify the clients of personal injury lawyers when they send the lawyers settlement checks, “is still alive, and I think probably well, but I don’t know how well.”

The VSB and the Virginia Trial Lawyers Association butted heads on the issue last year, with the VSB pushing for legislation directed largely at personal injury lawyers. The VTLA countered with a proposal that included notifications when funds are disbursed to lawyers in contexts other than personal injury settlements and enhancements to the Clients Protection Fund that reimburses victims of attorney theft.

The VSB Council voted to support payee notification in 2009 by a 39-25 vote after rejecting the concept two years earlier. The change in heart was largely the result of the disclosure of thefts of settlements by a Prince William County lawyer that totaled about $4 million.

Both sides submitted legislation, but then-Chief Justice Leroy Rountree Hassell Sr. asked them to withdraw the bills so that he could discuss it at a meeting of 17 statewide bar groups. The bar groups complied with the request, but the meeting never occurred, at least in part because of the deterioration of Hassell’s health, which resulted in his death in February.

Blank said bar officials met with the court last month and had not expected the payee notification issue to come up because it was not on the agenda, but Chief Justice Cynthia D. Kinser brought it up.

Blank said the meeting ended with the understanding that the VSB would coordinate a meeting of other bar groups and attempt to come up with compromise language to present to the court.

Jack L. Harris, executive director of the VTLA, said his understanding of the situation is as described by Blank and added that his organization is hopeful that discussions of the issue will be productive.

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