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4 Recent Trends in Professional Liability Claims Against Attorneys

4 Recent Trends in Professional Liability Claims Against Attorneys

Attorneys and lawyers are some of the leading authorities on legal claims, but they are not immune from having legal claims brought against themselves. In fact, professional liability claims, also commonly called malpractice claims, against attorneys have been steadily rising over the past 30 years. Data from the American Bar Association (ABA) suggests that a 75 percent increase in professional liability claims against lawyers since 1985. Given these numbers, it’s common belief that nearly all attorneys, regardless of experience, are highly likely to find themselves hit with a professional liability lawsuit at least once over the course of their career.

A professional liability claim is simply a demand for damages made against a defendant regarding neglect or errors over the course of their provision of professional services. Claims against attorneys do not require much information to be viable in court, but the complainant must provide the following three elements: proof that the attorney owed a professional duty to the complainant, proof that the attorney breached that duty and proof that the complainant suffered monetary damage as a direct result of the attorney’s breach of duty.

It’s important for attorneys to keep abreast of common trends in professional liability claims in their industry in order to better protect themselves and reduce their risk of being sued by their clients. A recent survey of lawyers’ professional liability claims consulted with nine of the top lawyers’ professional liability insurance companies in the country and identified the four most common practice areas generating the largest number of claims:

1. Commercial Real Estate

Lawyers specializing in commercial real estate claims are seeing an uptick in malpractice claims, largely due to the increased volume of commercial real estate transactions. Typical claims against the attorneys who handle these matters include; errors in preparing documents, language in contracts that doesn’t properly represent the client’s interests or other conflicts of client interests, errors involved in managing escrow fund balances and even physical damage to property due to alleged misuse of a lock box or similar system. Commercial real estate transactions often involve significantly larger amounts of money than residential properties, and clients are much more likely to bring a claim against the attorneys involved if they don’t feel they were represented properly.

2. Trusts and Estates

Similar to the practice area above, attorneys who deal with trusts and estates are also seeing a larger percentage of legal malpractice claims. One reason for this increase is the rapidly growing population of Americans entering the “elderly” demographic, bringing with them a higher volume of wealth transfer transactions. Another reason is because trust and estate law often involves very personal and sensitive matters, making these attorneys extremely susceptible to potential client dissatisfaction.

3. Cyber-Related Claims

Nearly every industry is at a higher risk of cyber-related claims, and attorneys are not excluded. Lawyers are trusted with the personal information of their clients, which can be devastating if put in the wrong hands.

4. Business Transactions and Corporate and Securities

The U.S. economy has been continuously growing, subsequently increasing workloads for attorneys that specialize in mergers and acquisitions and corporate securities. Again, wjhen large amounts of money are involved in a legal transaction, clients are more apt to come after their lawyers if something goes bad. Common legal malpractice claims in this practice area include simple scrivener errors, inadequate representation, breach of fiduciary duty and conflicts of interest.

In addition to being aware of the trends in professional liability claims against attorneys, it’s important for legal professionals to protect themselves with adequate professional liability insurance, which can help protect them financially in the event they find themselves tangled in malpractice claim.

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