May 26, 2006 – The Kentucky attorney general has confirmed that statute KRS 454.280 prohibits an insurance company from contracting with an intermediary to obtain the services of independent court reporters to take depositions in court cases in which the insurance company has a financial interest in the outcome of the case. Stated simply, an insurance company may not use a third party to do indirectly what it is prohibited from doing under the statute.
The Kentucky Court Reporters Association had requested that the attorney general analyze the validity and scope of Kentucky’s anticontracting statute in situations where insurance companies hire a legal services company “to procure” court reporting services. The attorney general confirmed that, “By using a third party, the insurance company changes the form of the transaction, but not the substance.”
Therefore, “We think the purpose of the statute is defeated where an insurance company or any other entity with a financial interest in the outcome of the case, other than an attorney for one of the parties, hires a court reporter indirectly through another entity.”
The statute exempts attorneys because they are officers of the court and are licensed, regulated, and disciplined by the Kentucky Supreme Court.
