Joined by lawyers tired of competitors who illegally solicit business following accidents, prosecutors are cracking down on a lesser-known, multimillion-dollar criminal enterprise in Texas: barratry.
Often derided as “ambulance chasing,” barratry — illegally offering legal services to people within 90 days following an accident — is a third-degree felony in Texas punishable by up to 10 years in jail. The difficulty in prosecuting the white-collar crime is often wrapped up in uncovering systematic insurance fraud schemes.
Texas lawmakers passed a law last session to bolster the war on barratry and a handful of notable arrests — including charges against a state representative — have been made this year, with presumably more to come.
In practice, barratry ranges from small-scale operations — case runners approaching accident victims at their home or a hospital, and then selling the case to a lawyer — to large-scale schemes, such aswhen telemarketers, chiropractic firms and legal offices conspire to lure patients, inflate injuries and bank millions off fraudulent insurance claims.
“I have seen a huge increase in this sort of activity lately,” said Wendy Baker, the Harris County prosecutor pursuing barratry charges against state Rep. Ron Reynolds, D-Missouri City. “I don’t know why some crimes become more popular than others, but at the moment, it seems to be barratry.”
Reynolds was arrested after an undercover investigation by the Harris County district attorney’s office determined a chiropractic firm was persuading patients to sign contracts naming Reynolds as their legal counsel before the patients had physical exams or met him. Reynolds was released on bail and issued a statement maintaining his innocence. He did not return calls for comment from The Texas Tribune.
“Although it appears that the charges filed against me are politicized, I do not take the matter lightly,” he said in the statement. “Since becoming an elected official, I have voted for new laws holding lawyers guilty of barratry more accountable to their victims.”
In the 2011 legislative session, the Texas House voted unanimously for a law that allows barratry victims to sue a lawyer or case runner to void an illegally solicited contract and collect any money paid to the lawyer plus damages. A person who is solicited, but does not sign a contract, can also sue for up to $10,000.
“It’s a law with some teeth,” said Bill Edwards, a personal injury lawyer in Corpus Christi who supports the new law. “The honest lawyers in the state are in the process of cleaning up the mess.”
The new law should increase the number of criminal prosecutions, because in addition to creating a financial incentive for plaintiffs to turn in lawyers and case runners who make illegal offers, Edwards said lawyers like him can provide criminal evidence, collected during pretrial discovery hearings in civil suits, to prosecutors and the State Bar of Texas.
“It’s a safe bet that we’re going to see an increase in the prosecution of this,” said Jesse McClure, one of two new special prosecutors the Texas Department of Insurance hired to increase prosecutions of insurance fraud. He added that Reynolds’ arrest “got everyone’s attention,” and he expects to prosecute a number of barratry cases that will come to light as a result of the new law and his insurance fraud investigations.