Sunday, December 9, 2007

Legal Malpractice Cases

As long as I'm not the defendant, legal malpractice cases are very interesting. Here are some things worth noting:

1. It's similar to any other negligence or malpractice need liability, damages, and collectability to have a case which an attorney will accept on a contingency. Legal mal cases have the added fun of the "case within the case". That is, when you are proving that the lawyer commited some act of negligence/malpractice, you also have to prove that the underlying case was win-able.....on liability, damages, and (arguably) collectability. This creates a fascinating litigation where you are essentially litigating the issues in two cases.

2. Have attorneys ever been sued for malpractising a legal malpractice case? Yes.

3. Sometimes an attorney is contacted by a client about a potential malpractice case. What if there was malpractice, but the client still had some rights in the underlying case, and the new lawyer pursued the legal malpractice claim and ignored other rights the client may have had. Here's an example: Client was a passenger in a bus which was in an accident with a car. The accident happened in an intersection and is a "question of lights" case. The first lawyer misses the year and 90 day statute of limitations on a City bus case. Plain and simple. The second lawyer gets the case and sues the lawyer. However, the three year statute of limitations on suing the car was viable when the second lawyer took the case, but runs out during the legal mal litigation. Can the second lawyer be third partied into the case by the first lawyers lawyers? Answer: Yes. Don't ask me how I know this!

4. Lawyers are not required to have malpractice insurance. The majority of small firms and solos have it, but not all. It seems crazy not to, yet many go without.

5. Legal malpractice insurance has some quirky rules. One nasty one is the requirement to report a "potential" claim when you become aware of it. If you don't report when you could have, you may face a disclaimer when a claim arises. What are the effects of being careful and reporting a potential claim? I don't claim to know the answer to this. What I can say is, it places a lawyer in a real dilemma. I'm not embarrassed to say I've reported a few potential claims that never became claims. I hated the feeling that the carrier "opened a file", I hated the detailed report they required, and I was uncomfortable with a lawyer for the carrier suggesting things I must do to minimize THEIR exposure. On the other hand, once I reported and complied, I felt relieved that they "had my back" if the client sued. The carrier did not "drop me" and as far as I could tell, they did not surcharge me.

6. Another quirky rule is that if you drop your coverage, you lose the coverage for the times you paid for. If I had insurance in 2005, dropped it in 2006, and in 2007 I am sued for something I malpracticed in 2005, I'm not covered. If you are retiring or changing careers, and you don't need coverage for new cases, you have to buy a "tail" policy to cover your past coverage. I guess they call it a tail because it's attached near the rear end.

7. There are lawyers who specialize in these cases, both plaintiffs and defendants. Like many specialists, they generally enjoy their practices and are enthusiastic.

8. I once defended an uninsured attorney in a legal malpractice case. It arose out of a real estate deal gone bad, resulting in a forfeited downpayment. As we did discovery in the case, I saw that the plaintiff, my clients former client, must have been a difficult client (actually, that is a gross understatement). Admittedly, my client was not an experienced real estate attorney, and the case was not handled well. Nevertheless, both the client and the new attorney were very hasty to blame the debacle on my client. It appeared that both client and lawyer forfeited the downpayment rather than fight for it, and immediately sued my client. I must say, I came to dislike the plaintiff and his attorney. I realized during the trial that for me, the plaintiff symbolized every whacked out loony client I had ever had. I ripped the plaintiff up pretty good during cross-examination, and kept going till the Judge told me it was enough and I should sit down. That was a nice case to win.

9. Here's a link to a blog about legal malpractice cases.

Next post......lawyers as clients.

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