In re Feinstein

Per Curiam.

Each applicant — one the corporate creature of a local bar association, the other a labor union — seeks our approval to function as a legal assistance corporation (Judiciary Law, § 495, subd. 5; 22 NYCBB Part 608, Buies of the Appellate Division) by furnishing prepaid legal services. The two proposed plans differ in several details, none pertinent to our consideration of the applications. The union’s application is recent; the other has been before us for some time, consideration thereof delayed because of proposed legislation on the subject then pending in the Legislature. The Legislature adjourned without acting on the matter, but, hopefully, that is not the last word on the possibility of further consideration. Regardless of 1 whatever differences exist between the plans and the nature of their sponsors, one common factor stands out and provides the basis for denial of the applications: both such plans are — indeed, any such plan must be—basically programs in the nature of insurance. There is no provision in law which gives this court authority to supervise insurance schemes in respect of rates, nature and quality of services, and the numerous other factors necessary for administration in an area so affected with the public interest. Nor do we possess either the personnel or the expertise required for such activity on our part. The only presently existing agency apparently capable of this task is the Insurance Department, though possibly the Public Service Commission might be deemed a suitable administrative agency. However, neither at this time seems to possess the requisite statutory authority. In. these circumstances we must deny the application.

This is not to say for one moment that the proposed programs would not promote the public welfare; indeed, such a reform is long overdue, but it should not take place in the manner proposed here. No such corporation, no matter how well intentioned its sponsors, should be self-supervising. The Legislature would do well, we" suggest, to give further consideration to the entire matter. The Law Revision Commission is presently conducting an “immediate study” of section 495 in the light of newly apparent problems (see Matter of Thom, 42 A D 2d 353), and will likely consider the subject of prepaid legal services in connection therewith. But, absent a careful comprehensive statute addressed to the problem, to approve these applications in present circumstances would not be appropriate.

1 Our Court of Appeals has found fee schedules acceptable (Lincoln Rochester Trust Co. v. Freeman, 84 N Y 2d 1), as has the United States Circuit Court of Appeals for the 4th Circuit (Goldfarb v. Virginia State Bar, 497 F. 2d 1, revg. 355 F. Supp. 491), although the United States Department of Justice may take a dim view thereof. (See N. Y. L. J., May 10,1974, p. 1 col. 5; 19 American Bar News, No. 5, p. 1, col. 3 [June, 1974].)