Pre-Paid Legal Services Announces Litigation Developments

17 November 2005

Pre-Paid Legal Services, Inc. (NYSE: PPD) ("Company") announced a trial court decision in a lawsuit filed against the Company in Holmes County, Mississippi in the matter of Barbara Booth v. Pre-Paid Legal Services, Inc., et al. A jury yesterday returned a verdict in favor of the plaintiff for punitive damages in the aggregate amount of $9.9 million against us and our chief executive officer. In this same case, a separate jury, six months ago, had previously returned a verdict in the aggregate amount of $40,000 for compensatory damages on claims by a purchaser of one of the Company's legal service memberships who paid the Company less than $800.00 during the life of a membership originally purchased in 2000. The Company believes this verdict is contrary to all the evidence presented and violates numerous procedural rights. The Company will seek appellate review of all aspects of this verdict and will continue to vigorously defend this case and other similar claims. About Pre-Paid Legal Services We believe our products are one of a kind, life events legal service plans. Our plans provide for legal service benefits provided through a network of more than 50 independent law firms across the U.S. and Canada, and include unlimited attorney consultation, will preparation, traffic violation defense, automobile-related criminal charges defense, letter writing, document preparation and review and a general trial defense benefit. We have an identity theft restoration product we think is also one of a kind due to the combination of our identity theft restoration partner and our provider law firms. More information about us and our products can be found at our homepage at http://www.prepaidlegal.com . Forward-Looking Statements Statements in this press release, other than purely historical information, regarding our future plans and objectives and expected operating results, dividends and share repurchases and statements of the assumptions underlying such statements, constitute forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. The forward- looking statements contained herein are based on certain assumptions that may not be correct. They are subject to risks and uncertainties incident to our business that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties are described in the reports and statements filed by us with the Securities and Exchange Commission, including (among others) those listed in our Form 10- K, Form 10-Q and Form 8-K, and include the risks that our membership persistency or renewal rates may decline, that we may not be able to continue to grow our memberships and earnings, that we are dependent on the continued active participation of our principal executive officer, that pending or future litigation may have a material adverse effect on us if resolved unfavorably to us, that we could be adversely affected by regulatory developments, that competition could adversely affect us, that we are substantially dependent on our marketing force, that our stock price may be affected by short sellers, that we have been unable to increase significantly our employee group membership sales, that our active premium in force is not indicative of future revenue as a result of changes in active memberships from cancellations and additional membership sales and that we may have material weaknesses in our internal control environment. Please refer to pages 38 and 39 of our 2004 Form 10-K and pages 8 and 9 of the Company's September 30, 2005 Form 10-Q for a more complete description of these risks. We undertake no duty to update any of the forward-looking statements in this release.

Source: PR Newswire

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