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Reducing Legal Malpractice Claims


Reducing Legal Malpractice ClaimsAttorneys are on the frontline of lawsuits defending clients against allegations of malpractice or errors and omissions related to the performance and delivery of work. Equally, attorneys can also find themselves sitting in the defendant’s chair when an unhappy client turns the table on them and sues for legal malpractice.

Yet, when a legal malpractice claims is made, often they can be resolved early on. The key is not to exacerbate the situation and turn a claim into a litigation nightmare. Following are some common missteps to avoid when dealing with a legal malpractice claim.

  • Don’t assume that a claim will automatically result in litigation. Most legal malpractice claims don’t have any merit. A client may be threatening a lawsuit in order to avoid paying an invoice or because he or she is unhappy with the outcome of his or her own case or matter. Additionally, even if an error did occur, a client must establish that he or she suffered financial damage a result of the attorney’s error or negligence. A client must also be prepared to pay for attorney fees to pursue litigation and weigh whether it’s worth pursing financially against the potential return on investment.
  • Don’t admit legal malpractice. It’s incumbent on an attorney to inform a client of a mistake, but before doing so immediately consult with another attorney who can provide an objective view, potentially saving a significant amount in defense costs and minimizing legal exposure. While failure to report an error increases the likelihood that claim will turn into a lawsuit, you want to ensure you don’t concede that the mistake and any resulting adverse developments constitute legal malpractice. Outside counsel can provide advice as to how to proceed with self-reporting an error.
  • Don’t avoid the problem. Ignoring the problem isn’t going to make it go away. Address the issue by providing the client with a copy of the file and by responding to client inquiries. If any issues need to be addressed, do so. Also, be sure that all appropriate notices are provided to your legal malpractice insurance company. Providing timely notice of a claim to the insurance company is vital because of the way in which coverage is triggered under a Legal Malpractice/Errors & Omissions policy. For example, a claims-made policy provides coverage for only those claims made during the policy term or any applicable extended reporting period.
  • Don’t make a settlement offer without your insurance company’s consent. While some claims merit early settlement attempts, a typical legal malpractice policy prohibits an attorney from making a settlement offer without the insurance carrier’s consent. It’s vital that any efforts to settle are coordinated your insurer. You could jeopardize coverage for the entire claim, even if the proposed settlement is within the policy deductible, if you settle without getting the okay from your carrier.

At Axis Insurance Services, we specialize in Professional Liability/Legal Malpractice insurance for attorneys, working with several top-tier insurance companies to provide you with comprehensive, competitive coverage. We can design a policy to meet your practice needs and address your specific exposures. Give us a call at (877) 787-5258 to discuss your E&O insurance.

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Blogged on: December 28, 2015 by Mike Smith
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