Conflict of Interest

We often hear the phrase "conflict of interest" . What does that phrase mean and when do conflicts of interest arise? Conflicts of interest arise when decision makers, be they school directors, councilmen, university or college trustees, or others in similar positions have personal, family, business or others interest that could effect their independent judgement and their faithful performance of duties to the institution they serve. Of course, most potential conflicts do not have such effect, they nevertheless must be addressed because even a perceived conflict of interest can be harmful to the institution. Usually, accomplished, active individuals like those who serve on such institutions inevitably are in engaged in activities and affairs of other institutions and organizations.
In most situations, conflicts of interest involve direct or indirect business relationships between the institution and the individual, they also arise in a variety of other circumstances. To illustrate, conflicts of interest occur when an individual or family member:

• conduct business with the institution,
• use institutional resources to promote his or her individual or family’s financial or other interest,
• uses confidential information about the institution to promote his or her individual or family interest,
• has a relationship with a competing institution,
  gains financially from an institutional transaction,
• assists an outside entity to benefit financially or otherwise from the institution in ways not available to that entity’s competitors,
• lends or borrows money or property from an entity or person who conducts business with the institution,
• receives gifts from an individual or entity who conducts business with the institution,
• accepts gifts or perquisites (perks) from the institution not readily available to other members of the institutional community,
• participates in or permits the approval of policies not in the institutions best interest,
• participates in or permits the rejection of policies that are in the institutions best interest,
• and promotes or participates in social or political agendas or campaigns that could have a detrimental effect on the institution.

Conflicts of interest by decision makers or even the appearance of such conflicts of interest, must be avoided. The only way a decision maker can avoid a conflict of interest is to be familiar with what constitutes them and to promptly identify a potential conflict. Of course, the decision maker should promptly disclose personal, family, business or other circumstances that could raise conflict questions. If a conflict is in fact identified, the decision maker affected, should of course, refrain from any action by the institution that involves the conflict and in no event, should the decision maker have a right to vote on the matter or even to be present when the issue is discussed by other institutional decision makers.

Submitted by:

Samuel J. Davis, Esquire

sdavis@davisanddavislaw.com

What is a Tort?: House Bill No. 34

A careless driver has caused an automobile collision and the injured victim does not know where to turn. He reads his automobile insurance policy only to add to his confusion. He calls his attorney and the first question he asks is "What is a tort?" This scenario plays out daily throughout Pennsylvania. People are injured through no fault of their own and are forced to "figure out" what type of insurance they had purchased. Few, if any, know what the word "tort" truly means. Nearly every day that very question is asked of me. " I have been injured in an accident through no fault of my own, what can I do? What is a tort?"

Blacks Law Dictionary defines a tort as a civil wrong for which a remedy may be obtained in the form of damages.

In 1990, the Pennsylvania State Legislature, in its collective wisdom, amended the Motor Vehicle Financial Responsibility Law to provide two types of "tort" options. One option would be the selection of full tort while the other option would be the selection of limited tort. Although the options sound good, when purchasing automobile insurance few people have any idea of what the options mean. Only after being injured in an automobile accident and they have conferred with an attorney do they truly understand their rights as controlled by the insurance policy they may have purchased years before. Full tort means one’s full right to seek compensation for injuries that have been sustained, or in other words, a full right to sue while limited tort, the other selection, limits one’s right to recover for injuries, or in other words, a limited right to sue.
Over the past seventeen years, Pennsylvanians have been confused and have continually misunderstood the automobile insurance which they have purchased. The Pennsylvania Legislature has offered no guidance or explanation. At least three House Bills commonly referred to as Plain Language Bills have languished in Committee for several years and hopefully at least one of them may soon be voted upon by the full membership of the House of Representatives. The most likely scenario is that House Bill No. 34 will be the first to be acted upon unless the Legislature continues to drag its feet. This legislation, commonly known as a Plain Language Bill, would change the language of automobile policies from the hard to understand terminology "full tort and limited tort" to the much more consumer friendly terminology of "full right to sue and limited right to sue," obviously making insurance policies easier to understand and allowing Pennsylvanians to best choose the type of insurance right for them and their families. Consumer confusion helps no one and I can think of no reason why every Pennsylvania representative and senator would not support the Plain Language legislation. Please call your legislator and senator and ask them to support House Bill No. 34. Don’t wait until you have been in an accident to find out about your automobile insurance. Check your policy and make sure you have selected the type of insurance that best protects you and your loved ones.

Submitted by:
James T. Davis, Esquire
jdavis@davisanddavislaw.com