Clinton Legal Team to Fight Insurers on Jones Suit Bills

Facing at least $1.5 million in unpaid bills from the Paula Corbin Jones case, President Clinton’s legal team is preparing to file suit against two insurance companies that stopped financing the president’s defense last year to force them to reverse their decision.

Clinton’s lawyers have hired another prominent Washington law firm, Covington & Burling, to handle the dispute with the insurers, and they plan to devote more attention to the issue now that the Jones case has been dismissed, a source familiar with the situation said Friday.

The president’s attorneys at the high-priced law firm Skadden Arps Meagher & Flom have tried for months to persuade the companies to continue footing their bill and now appear to be using the threat of a lawsuit to increase the pressure. But industry officials said the two firms--State Farm Mutual Automobile Insurance Co. and Pacific Indemnity, a subsidiary of Chubb Group Insurance--have no intention of volunteering any more money because they believe they have fulfilled the terms of the policies taken out by Clinton years ago in Arkansas.

On the other side of the Jones suit, the Dallas law firm representing her, Rader, Campbell, Fisher & Pyke, was operating on a contingency contract and finds itself out $900,000 in hourly fees that will go unpaid unless an appeal reinstates the case. In addition, the Rutherford Institute, the Virginia group sponsoring her legal battle, has paid more than $270,000 in related litigation expenses for such costs as travel and private investigators, but has collected only $100,000 through fund-raising. Jones separately has received at least $100,000 through her own direct-mail appeal, but the money has not gone to pay her lawyers.

At the same time, her previous lawyers, who quit in September, now cannot recover the $800,000 lien they placed against any winnings she reaped from the lawsuit. One of them, Joseph Cammarata, said Friday that they are considering their own suit to collect--not against their former client, but against Clinton on the grounds that they defeated his bid for delay in a successful Supreme Court appeal last year.

The maneuvering over money was probably inevitable following Wednesday’s decision by U.S. District Judge Susan Webber Wright to throw out the Jones lawsuit, which Jones may still appeal. For all of the high-octane media exposure of the case, much of the extensive legal work on both sides has gone uncompensated.