Recently Closed Claims’ Lessons August 2019
Post on August 16th, 2019
OBLIC paid approximately $758,015 to resolve 7 claims that were closed last month
Payments included loss payments, such as judgments awarded or settlement payments, and the attorneys’ fees and costs OBLIC paid to defend its insureds.
This is part of a continuing monthly series providing information on recently closed claims.
We will provide claim statistics on the areas of practice in which the act, error or omission occurred and generalized information on the cause of recently closed claims. Our intention with this series is to demonstrate the value that we provide to you, our insureds, through the experiences we have had with our other insureds and make you aware of the common areas of risk and ways to avoid similar claims in the future.
Hopefully, by seeing where your colleagues may have taken a step in error, you will know where to be cautious!
Recently Closed Claims by Area of Practice and Alleged Cause of the Claim:
- Bankruptcy – Allegedly providing incorrect advice in handling a creditor’s claim in a chapter 11 bankruptcy.
- Commercial Matter – Seller financing was arranged in purchase of business. However, business was also subject to a mortgage that was put in default by sale of business.
- Employment – Client lost his employment case on motion and alleged that he should have been advised to settle the claim for an amount offered by the employer prior to judgment.
- Domestic Relations – Alleged breach of standard of care for not including court jurisdiction to modify spousal support despite agreeing to terms in settlement.
- Probate, Estate and Trust – Failure to respond to requests for additional documentation after filing a long-term care Medicaid application.
- Probate, Estates & Trust – Insured took over an estate as fiduciary before it was discovered that the prior attorney stole cash from decedents home.
- Real Estate – Federal Debt Collection Practices Act (FDCPA) claims relating a foreclosure on real estate.
The claims closed in July illustrate the need to send written communications to clients confirming significant decisions made by the client. In two of the claims above, a written communication was provided to the client confirming advice provided to the client and the client’s decision to take a risk in spite of the advice. These letters were major factors in achieving a defense verdict, in addition to the excellent defense provided by counsel engaged by OBLIC on the insured’s behalf.
Documenting advice given and the client’s decision, via a letter or email to the client, can sometimes seem onerous. However, if such advice is not documented, you can run a distinct risk of a client’s second-guessing and convenient memories if the the client experiences a negative outcome. If you find yourself in a he said/she said dispute with a former client over advice given and decisions made, you have a much better chance of success if such advice was confirmed in a contemporaneous writing to the client.
If the thought of spending thirty minutes or less to write an email or letter to your client is too much to bear, how many hours do you think you will spend when you meet with your defense counsel, get your file together, review pleadings, answer discovery, attend mediation, prepare for and attend your deposition, attend pre-trials and hearings, and attend a multi-day trial?
When the client decides to roll the dice, does not take your advice, or gives up some right, put it in writing!
Cause of Claim does not mean that the claim was meritorious or that there were any damages arising from the alleged breach of the standard of care. The alleged cause is the brief summation of the allegation made by the claimant as to the error allegedly made by our insured.
There are lessons even from those claims in which liability is heavily contested.
In addition to the Recently Closed Claims noted above, we also closed six disciplinary matters last month.
Disciplinary coverage is separate and apart from the coverage available for “Claims” and are not included the totals noted above. All OBLIC Legal Professional Liability Policies provide an additional limited legal fee and expense coverage for disciplinary actions. The coverage is designed to reimburse you for the expenses for legal services charged by a lawyer to defend you.
See XIV. LIMITED LEGAL FEE AND EXPENSE COVERAGE FOR DISCIPLINARY ACTIONS in your policy for the terms and conditions of the disciplinary coverage.