The facts
Mr. Wilson, an attorney, worked in a supervisory position with the United States Department of Justice. He was admitted to his state’s local Bar Association in 1980. However, many years later, Mr. Wilson’s membership to the Bar was suspended due to his failure to pay the annual membership dues. As a result of his suspension from the Bar, he was contacted regarding the matter by the Department of Justice’s Office of Professional Responsibility.
Mr. Wilson alleged that he was not advised of his suspension by anyone until more than two years after it occurred. After examining his records, he confirmed that no payment had been made the prior three years, but he was unable to find notice or invoice from the Bar stating his delinquency.
After discovering that his dues had not been paid, Mr. Wilson remitted dues and penalties for the previous years. He was immediately reinstated as an active member of the Bar, effective on the date of payment. However, his reinstatement was not made retroactive which led to many significant professional difficulties. His appeal for retroactive reinstatement was denied by the Bar due to the bylaws stating that retroactive reinstatement can only take place if “proper procedures were not used or [if] there was an actionable error or omission on the part of the staff.” After his appeal was denied, Mr. Wilson filed suit in the local courts.
The result
Ultimately, the courts ordered that Mr. Wilson’s membership be reinstated retroactively. The suit filed was for a non-monetary judgment, as Mr. Wilson was not seeking any damages other than retroactive reinstatement to the Bar. Although he was not awarded any financial compensation, the suit cost the Bar and its insurance company over $100,000 in legal expenses.
The risk factors
Risk factor #1
The Bar Association should have clear and defined procedures in place for the notification and suspension of an individuals membership. All correspondence should be in writing, and sent through certified mail. These procedures should be stated within the bylaws of the organization.
Risk factor #2
Although payments were delinquent, the burden of proof of notification lies on the Bar Association. If they are unable to prove that proper and timely notification was made, reinstatement should be made retroactive at the time of appeal. The Association should also review their appeals procedure.
*The claim scenario is strictly documented for illustrative purposes only and provides an example of what a policy could cover. It is intended to provide a general overview of the program described. Please remember only the insurance policy can give actual terms, coverage, amounts, conditions and exclusions. Program availability and coverage are subject to individual underwriting criteria.
