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Payee Notification--Why Do Some Oppose this Simple Measure

By Ben Glass

Unfortunately, every so often a lawyer who is hell bent on stealing client settlement funds comes along. It's not often but its devastating to clients.

Here's how it typically works. The lawyer represents a client and, without the client's permission or knowledge, settles the car accident case with the insurance company. The insurance company issues a check, payable to lawyer and to client and mails it to lawyer.

Lawyer forges clients name and cashes check. Lawyer (until ultimately discovered) tells client "your case is not settled."

By and large, courts give no relief to the defrauded client. These lawyers end up in jail--thei insurance policies typically don't cover fraud--and judges tell clients who try to "undo" the settelments--"tough luck," the insurance company didn't do anything wrong.

There is a simple law that would virtually prevent this type of fraud from happening and its called payee notification. It would require the insurance company, when mailing a check to the lawyer, to also mail a notice to the accident victim to "notify" the victim that the check has been mailed.

What could possibly be bad about this rule? Nothing that I can think of. Yet some lawyers oppose it, mainly because "plaintiff's lawyers are singled out" and, I guess, this hurts their feelings.

This debate over payee notification is raging in Virginia. The public ought to be aware of the debate and join in the conversation.

Here's what one recetly defrauded victim said about the whole issue, speaking specifically about attorney-now felon, Stephen Conrad:

Conrad represented us, too. He stole $50K from us. Conrad did the same thing to everbody-no return phone calls, no paperwork, didn't tell us he settled our case (for 2 yrs.),forged my husband's name on both check and the release & even forged the witness names. Went to his sentencing on 11/14/2008. The bum wasn't even remorseful. In court he said he was sorry for the shame and embarrassment he caused his wife and kids. A very selfish, greedy man. Hope the bum gets his up the 'bum.' Disgusted, too, with the VA State Bar's Victim's Protection. What a joke! All the victim's will get a BIG $.06 on the dollar Conrad stole. The Bar won't pass legislation that will allow ins. companies to notify clients that their case is going to settle either. What does that tell everybody! There must be quite a few more crooks in the legal system. Seems they make laws to protect themselves. We'll think twice before hiring a lawyer again.

What do you think?

Originally posted at InjuryBoard by Ben Glass

Full post as published by Northern Virginia Personal Injury Lawyer on July 02, 2009 (boomark / email).