A Video About the Unscrupulous Public Adjuster
Criminal Acts by Public Adjusters
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Although they are considered professional claims people they will are not allowed to impinge on the work of the legal profession. Insurance company adjusters and independent insurance adjusters working for insurance companies can deal with https://zalma.com/bloginsurance coverage issues but a PA may not.
In one case, a public adjuster placed an insured in a position to pay damages to the insurer. In Chubb & Son Inc. v. Consoli, 283 A.D. 2d 297, 726 N.Y.S. 2d 398 (N.Y. App. Div. 05/22/2001), a public adjuster was involved in a scheme with one of Chubb’s adjusters to intentionally inflate a claim and then pay Chubb’s adjuster to approve the claim. The insureds’ public adjuster was later convicted on charges of mail and tax fraud and Chubb’s representative was found guilty of defrauding Chubb.
The court, recognizing that a PA acts as an agent for the insured and that there exists the well settled rule that a principal, even if innocent, is liable for acts of fraud that are within the scope of an agent’s actual or apparent authority, the court concluded that the insured was liable to Chubb and the claim was forfeited.
Indiana has refused to accept PAs at all. In Professional Adjusters, Inc. v. Tandon, 433 N.E. 2d 779 (1982), the Supreme Court of Indiana found that the statute providing for licensing of certified PAs who could then undertake negotiation of settlements between insureds and insurers was an uncon-stitutional violation of the separation of powers clause, in that it permitted practice of law by persons not required to be admitted to the bar and not subject to discipline by the Supreme Court.
The core element of practicing law is the giving of legal advice to a client. Merely entering into such relationship constitutes the practice of law in Indiana. [Professional Adjusters, Inc. v. Tandon (1982), Ind., 433 N.E.2d 779; In re Perrello (1979), 270 Ind. 390, 386 N.E.2d 174].
The public adjuster was hired by a client to give legal advice. He undertook the proffered employment, proceeded to examine the case, and gave advice as to what legal steps should be pursued. The exercise of such judgment on behalf of a client constitutes the practice of law and is restricted to persons who have qualified and been admitted to the Bar. By entering into the relationship and by giving legal advice, the public adjuster, a non-attorney, has engaged in the unauthorized practice of law. [State ex rel. Disciplinary Com’n of Supreme Court of Indiana v. Owen, 486 N.E.2d 1012 (Ind., 1986)]
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