Legal Services Aztec NM

Watch out when negotiating with insurance companies and appraisers.

By James Lynas
8/1/2003

If you run a body shop and you negotiate with insurance companies, you'd better be a bar-licensed lawyer. If you're an insurance appraiser and you negotiate contracts of repair or tort settlements, you'd better be an actual attorney as well. Otherwise, you could be doing something illegal called the Unauthorized Practice of Law or UPL.

1. There are two basic sides to this issue, and both revolve around the insurance industry's hands-on participation in the repair process. Legal boundaries are being crossed when a repair shop and insurance company conduct direct negotiations with each other in relation to a consumer's vehicle. Do shops cross the line of UPL when they negotiate the insurance or tort claim?

2. Do insurance companies cross the line when they negotiate the legal contract of repair on behalf of the car owner? I believe they do. Are You a Lawyer? We've all heard the term, "Jail House Lawyer," but what about "Body Shop Lawyer?" Unless you're a bar-licensed lawyer, you cannot represent anyone's legal rights but your own. This is spelled out in the UPL codes in each state. The American Bar Association Commission recommends that states consider taking action under UPL statutes when a non-lawyer activity poses a serious risk to a consumer's life, health, safety or economic well-being.

In the repair of automobiles, there are the issues of contract law, state repair act...