Calblog

Legal insurance

I think it's time we considered having legal insurance that works like medical insurance. RIght now, we have plans like Pre-paid Legal or Lawyers Assurance Group, which allow members to ask questions as part of the plan and then get a reduced hourly rate for additional services. I suppose you could review the reduced hourly rate as a "co-payment" but it does not come close to the benefit of many insurance plans because the hourly rate is still rather high. We also have liability insurance which covers defense of certain claims but the insurance company picks the lawyer and the claims covered are more limited.

What I am envisioning is something like the PPO plans. Insureds go to a lawyer for whatever they need, the lawyer bills the insurance company and gets their fees reduced but paid.
The first reaction on my part was that this might increase litigation, already at a point where the system can't handle it. However, I think it would reduce it. First, people are encouraged to get proactive care -- contracts will be properly drafted, wills will be written, leases will be reviewed. Second, if both sides of a case (plaintiff and defendant) are insured, contingency lawyers are eliminated and the downsides of a contingency arrangement are eliminated. Third, I don't believe that most people want to litigate. Expense aside, it's a long, draining process. With a system where no one really benefits from dragging on a case, alternative dispute measures may be more prevalent. Only cases that need a jury will get one.