Virginia recently adopted a "payee notification" rule, requiring insurance companies to notify an injured person when the insurance company sends their lawyer a settlement check.
What is this and why is it necessary?
Usually when someone is seriously injured as a result of medical malpractice, in a car accident, or due to a construction accident, they hire the best lawyer they can find to represent them - help them make up for the harms and losses some other person or company caused. Most businesses, hospitals and people have insurance to pay judgments and settlements if they are negligent and hurt someone else. And when a personal injury, medical malpractice case or wrongful death case is settled, the insurance company makes the check payable to both the client and the lawyer and the check is deposited into the law firm trust account and the attorney distributes the proceeds from his or her trust account.
And if you've hired the best lawyer for your case, so far so good.
But several years ago, one lawyer in Woodbridge stole about $4 million from his clients - mostly small personal injury and workers compensation clients, most of whom had never been through the process of a lawsuit or workers compensation claim before, I suspect. He apparently did this for a number of years, forging signatures of his clients, making up fake documents, etc. (he was caught of course and disbarred and is in jail).
So I think this rule makes sense. Especially if it stops people like the Woodbridge lawyer.
And I've heard lots of arguments that it is a burden on lawyers, gets in the way of the attorney-client relationship, etc.
But I tell my clients the best lawyer for them will be open about everything, so they know when a settlement check should be coming from the insurance company. Much better that there is now a little more paperwork than we let someone else steal their clients' money - any honest, hard working lawyer representing people wants to prevent that from happening again.