This article from the venerable Madison County Record reports that the Lakin Law Firm, which is a defendant in a big legal malpractice case arising from structured settlement loses, may now face loss of coverage.
"Lakin Law Firm founder Tom Lakin has sworn in a civil suit that he saw no liability on his part for the disappearance of money from structured settlements of his clients.
Clients of Lakin and other firms lost about $50 million eight years ago when the manager of their settlement funds, James Gibson, stole the funds.
Gibson was arrested in South America and went to prison in America.
Attorneys who had advised clients to trust him faced possible malpractice charges. Their insurers reimbursed the clients.
Lakin’s malpractice insurers, however, have not paid. "
Since 2002 the Illinois State Bar Association Mutual Insurance Company has sought a Sangamon County circuit court order rescinding a malpractice policy it issued to the Lakin firm in 2001.
ISBA Mutual argues that it would not have issued the policy if the firm had not misrepresented facts in its policy application.
According to ISBA Mutual, the firm stated it did not know of claims or potential claims against it when the firm knew about such claims.
The firm switched its malpractice to ISBA Mutual from American National Insurance, later known as Great American Insurance.
In 2002 ISBA Mutual filed suit in Sangamon County for declaratory judgment against the firm.
Robert Chemers of Chicago wrote that before ISBA Mutual issued the policy, the firm advised clients of potential claims from Gibson’s theft.