Collingsworth Opinion Signals No Coverage Under Lawyer Professional Liability Insurance

Collingsworth Opinion Signals No Coverage Under Lawyer Professional Liability Insurance

Introduction: A Pivotal Case for LPL Coverage Analysis

The June 2, 2026 memorandum opinion issued in Collingsworth-opinion.pdf provides a detailed examination of litigation conduct that goes far beyond ordinary legal representation. While the court’s decision focuses on denying a motion for a new trial, it also offers critical insights for insurers and law firms evaluating whether such conduct would be covered under a Lawyers Professional Liability (LPL) policy.

From an insurance perspective, the opinion strongly suggests that the acts at issue would not qualify as “professional services”—a foundational requirement for coverage—and instead may be characterized as intentional, fraudulent, or criminal conduct, which typically falls outside policy protection.

Key Findings from the Court’s Opinion

The court upheld significant jury findings against the defendants, including liability under the Racketeer Influenced and Corrupt Organizations Act (RICO) and defamation. [Collingswo…th-opinion | PDF]

1. Affirmation of RICO Liability and Intentional Conduct

The opinion confirmed that the jury found defendants intentionally participated in a pattern of racketeering activity, including acts such as:

• • Witness bribery
  • Witness tampering
  • Obstruction of justice
  • Money laundering
  • Wire fraud
  • Extortion [Collingswo…th-opinion | PDF]

The court emphasized that these acts required intentional conduct to establish liability. [Collingswo…th-opinion | PDF]

2. Findings of Defamation Per Se

The court also reaffirmed that the defendant’s statements constituted defamation per se under Alabama law, meaning damages were presumed without requiring proof of harm. [Collingswo…th-opinion | PDF]

3. Substantial Damages Upheld

The jury’s award—including $68 million in RICO damages (subject to trebling)—was upheld as supported by the evidence. [Collingswo…th-opinion | PDF]

Why This Likely Falls Outside LPL Coverage

1. Conduct Does Not Align with “Professional Services”

Most Lawyers Professional Liability policies provide coverage only for acts arising from the insured’s rendering of legal services. The conduct described in the opinion includes:

• • • Payments to witnesses concealed from opposing parties
    • Efforts to influence testimony
    • Participation in an alleged enterprise with improper purposes

The court highlighted evidence showing payments to witnesses, including undisclosed and repeated financial transfers tied to testimony. [Collingswo…th-opinion | PDF]

These types of actions are not typical legal advocacy but instead resemble extra-professional conduct, suggesting they would not qualify as covered legal services.

2. Intentional and Criminal Acts Typically Excluded

LPL policies almost universally exclude:

• • • Intentional wrongdoing
    • Fraudulent acts
    • Criminal conduct

The opinion repeatedly underscores intentional misconduct as part of the RICO findings and affirms that the jury determined the defendants engaged in intentional acts forming a pattern of racketeering. [Collingswo…th-opinion | PDF]

Because RICO liability inherently requires intentional unlawful acts, coverage exclusions would likely apply.

3. Business Enterprise / Personal Gain Issues

While the opinion does not explicitly address insurance, it references financial structures and payments that were not limited to ordinary legal fee arrangements, including the use of third-party funding sources. [Collingswo…th-opinion | PDF]

Such facts can intersect with common LPL exclusions for:

• • • Business enterprise activities
    • Conflicts of interest
    • Personal financial gain

From an underwriting perspective, these facts further distance the conduct from insurable professional services.

Court Reasoning Supports the Non-Coverage View

The court repeatedly rejected arguments that the defendants’ conduct was improperly evaluated or misunderstood. Instead, it:

• • Found the verdict was supported by the weight of evidence [Collingswo…th-opinion | PDF]
  • Held that intentional acts were proven through testimony and financial evidence [Collingswo…th-opinion | PDF]
  • Determined that procedural and evidentiary challenges did not undermine the integrity of the trial

This reinforces that the case involved substantiated findings of deliberate conduct, not mere negligence or errors in legal judgment.

Implications for Law Firms and Insurers

1. Coverage Depends on the Nature of the Conduct

This opinion highlights a key distinction:

• • Covered: negligence, errors in legal judgment
  • Not covered: intentional schemes, fraudulent conduct, or criminal activity

The facts at issue fall squarely in the latter category.

2. Risk of Personal Exposure for Attorneys

Because LPL policies are unlikely to respond, attorneys involved in similar allegations may face:

• • Personal liability exposure
  • Significant defense costs outside policy coverage
  • Potential reputational damage

3. Heightened Scrutiny for Litigation Practices

The court’s detailed analysis of witness payments and litigation tactics underscores the importance of:

• • Transparency in witness handling
  • Compliance with ethical rules
  • Documentation of legitimate litigation expenses

A Clear Signal for Coverage Denial

The opinion in Collingsworth-opinion.pdf provides a roadmap for why insurers would likely deny coverage under a Lawyers Professional Liability policy.

Given the court’s findings of:

• • Intentional misconduct
  • Racketeering activity
  • Improper financial dealings
  • Defamation per se

the underlying acts would almost certainly fall outside the definition of covered professional services and within standard policy exclusions.

For insurers and law firms alike, this case serves as a critical reminder: not all conduct performed by a lawyer is insurable simply because it occurs within the context of litigation.

Request a Lawyers Professional Liability Quote