Firms Likely to Continue Bail Bonds for Clients

The president of a statewide bail agents’ group said Monday that most California criminal defendants whose bonds were canceled Sunday as a result of a court-ordered liquidation action against two insurance firms will not have to pay for new bail bonds.

Barry Pearlstein, president of the California Bail Agents Assn., said reputable agents are likely to pay the premiums for defendants who had bonds secured by the Calabasas-based insurance companies, if courts require them to post new bails.

“The bail agent is going to be, in most of these cases, picking up the premium,” he said, referring to the customary fee that defendants pay to secure a bond.

Thousands of criminal defendants face the prospect of paying the fee a second time because their original bonds were canceled Sunday when the two insurance firms were declared insolvent.

Bail is financial security that judges require defendants to post to ensure that they appear in court when they are supposed to. Instead of paying the entire amount of the bail themselves, defendants usually pay a 10% fee to a bail agent, who obtains a bond for the entire amount from the insurance company. If the defendant skips bail and the bail agent is unable to find him, a judge orders the insurance company to pay the full bail to the court.

A judge in Nebraska declared Amwest Surety Insurance and its subsidiary, Far West Insurance, insolvent in June and November. The Nebraska Department of Insurance then canceled all of the firms’ bail bonds effective Sunday.

At the time the companies were declared insolvent, they had bonds outstanding for about 300,000 defendants nationwide, about 3,000 of them in Los Angeles County.

But on Monday, Tim Wagner, director of the Nebraska Department of Insurance, said many of the criminal cases involving those defendants had been disposed of since June or their bonds had been otherwise cleared. He said now there are only about 100,000 defendants nationwide with outstanding bonds through the two companies.

The bond cancellations have created much confusion because bail agents are saying they no longer have authority to pursue defendants who skipped bail insured by the two companies.

Many judges have expressed concern that criminal defendants might fail to appear in court.

Los Angeles Superior Court Judge Dan T. Oki, calling the situation “unprecedented,” issued an order directing judges to review their case files and determine whether defendants should be rearrested and made to post a new bail.

Pearlstein said state laws do not require bail agents to pay the new premium, but most reputable agents would feel obligated to continue providing the bond.

On Monday, most judges were not ordering new arrests, Oki said, because the overwhelming majority of the canceled bonds involve misdemeanors or low-grade felonies. Most judges probably will wait until each defendant’s next court date to decide whether to require a new bond or to release them on their promise to appear in court.