Class action masters Freed & Weiss don't carry malpractice insurance

Jesse Ammerman Dec. 22, 2006, 3:04am

Freed & Weiss headquarters in Chicago

Two of the most active class-action plaintiff's attorneys in the Madison and St. Clair County courts do not carry malpractice coverage, even though one was once suspended by the Illinois Bar for harassing several women.

While such lack of coverage does not violate Illinois law, it raises questions as to the adequacy of representation that class-action members in the firm's cases are receiving.

Eric D. Freed and Paul M. Weiss, of the Chicago firm Freed & Weiss LLC, continue to represent class-action plaintiffs and have won a series of major class action verdicts in Illinois.

The firm, which concentrates exclusively in the area of class action litigation, is currently prosecuting a large number of consumer class actions in Illinois and throughout the country, focusing on investment fraud, product liability, antitrust, consumer fraud, contract, tort, and insurance fraud. Freed & Weiss, along with the Lakin Law Firm, has gained national attention for spearheading the onslaught of class-action suits in Madison and St. Clair Counties in recent years.

Yet few, including many of the class-action members themselves, likely know about the firm's background or about Weiss's previous brushes with the Illinois Supreme Court's disciplinary authority.

Freed co-founded the firm with Weiss and received his law degree from the University of Illinois in 1991. He was admitted to the Illinois Bar in 1992 and is licensed to practice in California as well. Before forming Freed & Weiss, Freed focused on consumer, antitrust, and securities class action litigation.

Freed has been co-lead counsel on several major class-action cases to come through the courts in Madison and St. Clair counties. According to the Attorney Registration & Disciplinary Commission (ARDC) of Illinois, Freed does not carry malpractice coverage but has not been disciplined by the Illinois Supreme Court.

Weiss, however, was suspended by the Illinois Supreme Court in 1997 for making obscene phone calls to several women, including a minor whom he'd seen at a high school volleyball game.

Weiss's suspension lasted 30 days and he was placed on probation by the ARDC for two years. Weiss moved to Seattle and practiced law there while his punishment was meted out in Illinois. Weiss resumed practice in Illinois in 1998, where he began securing large verdicts and settlements as co-lead counsel on several class-action suits in Madison County with Brad Lakin of the Lakin Law Firm.

Between 1998 and 2001, the number of class action suits pending in Madison County grew from two to 43 - a majority of which were filed by the Lakin firm and Freed & Weiss.

When asked in 2002 why dozens of his class action suits rest in Madison County courts, Weiss said, "I'd have to say it's the results: great recoveries for the class."

Weiss, 39, attended Indiana University for both his undergraduate and law degrees, and received his J.D. in 1993. Weiss is currently admitted to practice in the State of Illinois, the United States District Courts for the Southern and Northern District of Illinois and the federal trial bar.

Weiss is single, based in Chicago and has property in Chicago as well as the northern suburbs of Wheeling and Northbrook. He does not have a permanent residence in the downstate area where most of his cases proceed.

Weiss's recent political contributions include a $15,000 donation to the campaign for Bruce Stewart, Democratic judicial candidate for Illinois' Fifth Appellate District. Stewart unseated incumbent judge Steve McGlynn in the November 2006 election in a contentious race pitting lawyer and labor groups against business interests.

The Fifth Appellate District covers the 37 southernmost counties in Illinois - including Madison and St. Clair - and Stewart will be in a position to hear any of Weiss's cases that are appealed from the Madison or St. Clair County Circuit Courts.

Of greater concern, however, is whether Weiss' failure to carry malpractice coverage violates the law or breaches a fiduciary duty to clients in light of his disciplinary history. Currently, Illinois does not require attorneys to carry malpractice coverage (Oregon is the only state that does).

However, Illinois is one of eight states compelling attorneys to disclose their insurance status on their annual registration statements and make such information available to the public.

Five states - Pennsylvania, Ohio, New Hampshire, South Dakota, and Alaska - require attorneys to disclose their coverage status directly to clients.

Either form of the "mandatory disclosure" rule aims to encourage attorneys who can afford insurance to obtain it, while empowering clients to make informed decisions when selecting counsel. State bars have increasingly come under the view that since the legal profession requires an attorney's ethical obligation to reveal facts material to the representation, disclosure of an attorney's malpractice coverage is relevant to such analysis.

Despite adoption of the disclosure rule, lack of malpractice coverage remains an issue among lawyers.

In Illinois, approximately 20 percent of attorneys operate without malpractice coverage. While premiums have risen dramatically in recent years for lawyers as well as doctors, the costs have proven more prohibitive to solo practitioners and small firms (40 percent of which are uninsured), than major class action firms.

Meanwhile, most prominent Illinois firms prosecuting class actions - such as the Lakin law firm, Jenner & Block, and Corboy & Demetrio - all carry malpractice coverage.

Although Illinois and most states do not require all attorneys to carry malpractice coverage, some are carving out exceptions for those with prior suspensions or disciplinary histories.

In a 2002 Delaware case, in re: Sullivan, the Delaware Supreme Court conditioned a suspended attorney's reinstatement upon his carriage of malpractice insurance.

The court held that "[t]he primary goal of the lawyer disciplinary system is to protect the public. Although legal malpractice insurance is not mandatory for all members of the Delaware Bar, there is precedent in this jurisdiction and other jurisdictions to require a lawyer, in an appropriate case, to have malpractice insurance."

This approach has yet to catch on in Illinois, however, where caveat emptor remains the norm for clients hiring counsel with checkered pasts.

Once class members join a suit led by an uninsured attorney, chances of recovery for malpractice are virtually nil. According to Nancy J. Moore, a law professor at Boston University and an expert on class action litigation, class members would have trouble suing for malpractice even against an attorney that is insured.

"Indeed, for a variety of reasons it is often difficult for class members to sue the class attorney for malpractice, particularly if the class has been certified and the court has approved the lawyer's adequacy of representation."

Moore said that she is "not aware of any practice of courts inquiring whether or not a potential class lawyer carries insurance."

The Illinois statute governing class-actions requires that the party's attorney be qualified, experienced and generally able to conduct the proposed litigation. The code and cases referring to it are silent on the issue of whether a lack of malpractice coverage might impair an attorney's ability to fairly and adequately represent the class, should problems arise.

However, this could be a factor for a judge to consider when weighing whether to certify a class under the counsel of an attorney who has been censured by the ARDC in the past yet continues to work without malpractice insurance.

If a judge certifies a class with an uninsured attorney such as Weiss as its counsel, it is up to the attorney himself to apprise clients of his insurance coverage if he so chooses. Such disclosure is unlikely since most class-action members know their attorneys only in the abstract, and vice versa.

Only the most discerning class-action members with time to peruse online ARDC records would know of the inherent risk involved with an uninsured firm such as Freed & Weiss.

Meanwhile, according to Moore, courts have yet to enforce a fiduciary duty to disclose insurance coverage directly to clients. Nevertheless, an attorney has a fiduciary duty under Illinois law to maintain fidelity, honesty, and good faith in all professional dealings with a client. Whether such honesty and good faith includes carriage of malpractice insurance or disclosure of a lack thereof remains to be inferred by attorneys and judges themselves.

As of now, it is left to judges in the courtrooms where Freed & Weiss are litigating to determine their fitness as class counsel.

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