Virginia Bar president considers attorney trust audits
Headline Legal News
The president of the Virginia State Bar is proposing random audits of lawyer trust accounts.
Lawyers use trust accounts to temporarily hold real estate proceeds or retainers until they are disbursed to a third party or -- once a fee is earned -- to the lawyer.
It is a severe violation of professional conduct for a lawyer to mingle trust account money with personal funds or operating money.
But it does happen.
According to the state bar, a Virginia Beach attorney had his license revoked after he wrote 72 checks that he couldn't cover from 2002 to 2005. The checks totaled $3.3 million.
Bar president and Norfolk lawyer Howard Martin Junior says will make the audit proposal to the bar's executive committee next month. The American Bar Association recommends that every state conduct random audits to protect the public.
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Workers’ Compensation Subrogation of Administrative Fees and Costs
When a worker covered by workers’ compensation makes a claim against a third party, the workers’ compensation insurance retains the right to subrogate against any recovery from that third party for all benefits paid to or on behalf of a claimant injured at work. When subrogating for more than basic medical and indemnity benefits, the Texas workers’ compensation subrogation statute provides that “the net amount recovered by a claimant in a third‑party action shall be used to reimburse the carrier for benefits, including medical benefits that have been paid for the compensable injury.” TX Labor Code § 417.002.
In fact, all 50 states provide for similar subrogation. However, none of them precisely outlines which payments or costs paid by a compensation carrier constitute “compensation” and can be recovered. The result is industry-wide confusion and an ongoing debate and argument with claimants’ attorneys over what can and can’t be included in a carrier’s lien for recovery purposes.
In addition to medical expenses, death benefits, funeral costs and/or indemnity benefits for lost wages and loss of earning capacity resulting from a compensable injury, workers’ compensation insurance carriers also expend considerable dollars for case management costs, medical bill audit fees, rehabilitation benefits, nurse case worker fees, and other similar fees. They also incur other expenses in conjunction with the handling and adjusting of workers’ compensation claims. Workers’ compensation carriers typically assert, of course, that, they are entitled to reimbursement for such expenditures when it recovers its workers’ compensation lien. Injured workers and their attorneys disagree.