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ISBA Mutual: Policy Won’t Cover Attorney Fee Disputes

September 16, 2019 | Posted in : Billing Record / Entries, Coverage of Fees, Ethics & Professional Responsibility, Fee Dispute

A recent Law 360 story by Celeste Bott, “Novartis Whistleblower Attys Slam ‘Unjust’ $1.4M Fee Award,” reports that the Illinois State Bar Association Mutual Insurance Co. asked an Illinois state judge to declare it has no duty to defend an Illinois attorney fighting a lawsuit over alleged overbilling, saying lawyers' billing functions aren't a covered professional service.  The money at issue would not be considered damage under its policy, the insurer said in a Cook County Circuit Court complaint.

ISBA Mutual contends it's not on the hook for a fee dispute between Chicago attorney Alan E. Sohn and his firm and Randy Sly, the executor of an estate seeking to recover more than $280,000 stemming from "unreasonable and unnecessary billing" by Sohn.  Sohn's July 2016 to July 2017 insurance policy covers claims arising out of a wrongful act, including the "rendering of or failure to render professional services."

ISBA Mutual defines that term to mean "services rendered by the insured as a lawyer, including services, whether or not for a fee, as an administrator, arbitrator, conservator, executor, guardian, mediator, notary public, personal representative, real estate title insurance agent, receiver, trustee or in any other similar fiduciary activity," according to the filing.  Not included in that definition is the billing function of a lawyer or law firm, ISBA Mutual said.  The insurer said the suit against Sohn seeks recovery of money that wouldn't be considered damages under the policy, including fees "incurred as a consequence of the firm's or Sohn's billing."