Tips on Dealing with a Malpractice Claim

It can be scary to find yourself on the receiving side of a malpractice claim, but there are certain things you can do to make sure you don’t make a bad situation worse. A good place to start would be reviewing any applicable legal malpractice policy to identify your obligations and formulate a plan.

Lawyers sometimes tend to respond to claims in ways that complicate matters and may make it hard to avoid litigation. Any missteps early in the process can indeed increase the risk of significant exposure and defense costs. Let’s look at four things you should do early on to ensure that matters don’t get any worse.

Not All Mistakes Mean Malpractice

Attorneys have a duty to their clients to keep them informed, even when they have to self-report material mistakes that impact the representation. In some situations, thought, there’s a fine line between simply reporting the facts and admitting to legal malpractice.

Attorneys who do not report material mistakes in a timely manner may face significant risks, including the potential tolling of the statute of limitations and sometimes bar grievances. What’s more, hiding a material mistake from clients may only give them and their malpractice counsel even more incentive to file suit.

On the other hand, attorneys admitting to legal malpractice when malpractice has not occurred may face serious consequences. This can make defending the lawsuit on the issue of liability a lot more difficult. Admissions can also violate the “no admissions” clause in typical legal malpractice insurance policies, thus negating insurance coverage.

As a matter of law, a mistake in an attorney-client relationship does not automatically equal liability for legal malpractice. Data on the matter confirms that many claims are without merit. There are elements of duty and causation that impose and burden on plaintiffs to prove more than just the existence of a mistake. However, if an attorney tells their client that a mistake constituted malpractice, it may create liability where none existed.

Attorneys generally find it prudent to report any material adverse development in a representation to the client, also mentioning whether the development is due to the attorney’s action or inaction. Attorneys can report mistakes, but also stop short of conceding any malpractice. Since there is such a fine line, it would be advisable for attorneys to consult other counsel before reporting to their client, as someone else could offer an objective view and save a lot of defense costs and exposure.

Not All Claims Lead to Lawsuits

It’s always advisable that lawyers don’t overreact when a client asserts a claim. Expressing their dissatisfaction with a representation or threatening to file a suit does not necessarily mean that that will happen. Some clients do sometimes threaten a claim because they are unhappy with a result or simply do not want to pay the bill, but those scenarios don’t usually support a viable legal malpractice lawsuit.

Clients may avoid filing suit because of heavy legal burdens, as well as financial and other pressures. In some states, expert testimony is required, as well as an affidavit from an expert, before filing a legal malpractice complaint. That means that plaintiffs must present proof of a negligent act or omission and must incur expert fees upfront.

Thus, lawyers receiving a claim should remain calm and keep a level head in assessing the strength of the claim and the possibility that it will actually lead to litigation.

Don’t Be TOO Confident

While it’s not always likely that a claim will go anywhere, it’s also not a good idea to just ignore it. While some lawyers overreact, other simply ignore the claim in hopes that the client will just change their mind, but this is rarely a good strategy.

Doing so could also put lawyers’ legal malpractice coverage at risk, as many policies require notice of claims or potential claims. Even if a client has not yet initiated litigation, most policies usually requires the reporting of any circumstance that might give rise to a claim. Some policies provide coverage based on when the claim is reported to the insurer. When the attorney actually provides notice may affect whether the claim falls within the policy’s effective dates.

Resolutions May Require the Insurer’s Consent

In some cases, lawyers may consider early settlement opportunities for a claim prior to the filing of a lawsuit, especially if the amount required to settle is much smaller than the costs and exposure of the claim. Typically, though, legal malpractice insurance policies prohibit attorneys from making a settlement without consent from the insurance company.

If that is the case, settling the malpractice claim may need to be coordinated with the lawyer’s insurer. Failing to follow their requirements could bring about significant risks and lawyers may find themselves without coverage for the claim.

Malpractice claims are always negative situations, but they don’t need to turn into nightmares. Lawyers facing malpractice claim can soften the blow by promptly facing the situation and considering the issues mentioned above.