Recently Closed Claims’ Lessons November 2019
Post on November 22nd, 2019
OBLIC paid approximately $7,005 to resolve 3 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:
- Collections – Allegations of violations of the Federal Debt Collection Practice Act (FDCPA) against the Insured for not specifically identifying the amount of interest and costs in the complaint and for sending an allegedly non-conforming dunning letter.
- Probate, Estates & Trust – Allegation that the Insured failed to properly advise an estate fiduciary about properly accounting for estate assets.
- Probate, Estates & Trust – A pro se beneficiary of a trust alleged malicious breach of fiduciary duty in the Insured’s representation of the trustee.
The claims closed this month demonstrate an important warning for attorneys: claims can be made by non-clients.
Generally, the plaintiff must show privity with the attorney-client relationship in order to succeed in a legal malpractice claim. See Simon v. Zipperstein, 32 Ohio St.3d 74 (1987). In the probate, estate and trust context, the non-client beneficiary of the estate can establish privity if they are vested beneficiaries prior to the passing of the decedent. See Elam v. Hyatt Legal Services, 44 Ohio St.3d 175. Keep this concept in mind as you draft estate plans and organize asset transfers. Do you owe a duty to the trustee of your client’s irrevocable Medicaid trust? What about the client’s spouse? The answers to those questions are not always clear and can be case dependent.
Privity is not an issue for violations of the FDCPA as they are separate statutory claims rather than common law negligence. Attorney-collectors must recognize that they are targets under the FDCPA and face exposure from those non-clients from which they are seeking to collect. When it comes to consumer collections, the current state of the practice is not if you will receive a claim for allegedly violating the FDCPA, but when.
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 to be learned from those claims in which liability is heavily contested.
In addition to the Recently Closed Claims noted above, we also closed two disciplinary matters last month.
Disciplinary coverage is separate and apart from the coverage available for “Claims” and is not included in 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.