ABA Profile of Legal Malpractice Claims Study 2020-2023: A Recap and Some Thoughts

Since 1985, the ABA has published studies regarding market trends in the lawyers professional liability marketplace.  The most recent study, encompassing 2020-2023, was recently released. The study provides analysis and predictions regarding areas of practice and the types of errors that are driving legal malpractice claims.  The data is provided by lawyers professional liability insurers, including Swiss Re Corporate Solutions. 

Notably, but not surprisingly, estate, probate and trust claims have increased by 1.6%, and involve about 14% of all claims reported by all insurers.  On the claims side, we have observed this trend, which appears attributable to the Great American Wealth Transfer.  One of the most important risk management tips for practitioners doing this type of work is to avoid conflicts of interest, which is also one of the most frequently alleged errors in legal malpractice claims.  It is imperative to maintain privilege with your client and keep non-client family members out of your client meetings.

Another area that is trending upwards in claim frequency is "Other Written Opinions."  While this may encompass a variety of practice areas, please make particular note of this if you are a defense attorney, as this is an area where attorneys are getting increasingly sued.  Ensure that your case analyses are comprehensive and appropriately advise your clients of potential case outcomes.

There is some good news for certain areas of practice.  Claims in the following areas reflected a decrease: personal injury -3.58%, family law -2.79% and criminal law -2.2%.  It appears that these statistics are related to COVID-19 restrictions.  Regardless of this decrease, continue to remain on guard!  Always use appropriate risk management protocols within your firm.

Claims against firms with over 500 attorneys increased, while claims against smaller firms dropped, particularly for firms with five or fewer attorneys.  It appears that this may be due in part to attorneys retiring and younger attorneys joining firms.  This trend also appears related to the COVID-19 pandemic due to staff turnover and remote work resulting in more errors.  Attorneys should remain cognizant of the duty to supervise younger attorneys as well as staff.

With regards to the types of errors that are driving claims, failure to timely commence proceedings, settlement negotiations, and administrative errors increased.  To an extent, it is unclear what has caused this increase, as many processes – such as firm calendar systems – are now computerized.  To avoid being sued for "human error," make sure that your firm has a computerized calendar system designed for law firms with dual controls.  Stay on top of routine docket calendaring, so that you do not become part of this data set!

As to settlement negotiations, it appears the uptick in claims stemming for this issue also surrounds the pandemic.  Many courts were closed, and trial dates were set well in advance resulting in plaintiffs wanting to settle earlier than was previously the case.  That, coupled with remote mediations and the lack of face-to-face contact, appear to have resulted in a lack of communication between clients and attorneys. We also question whether the trend towards dispensing with plenary sessions in mediations is leading to "buyer's remorse" after a settlement occurs.  Be mindful of your duty to communicate with your client. Confirm settlement discussions in writing, along with advising your client of the ramifications of their choice to settle (or not).

By being cognizant of the factors influencing lawyers professional liability claims, you can help insulate your firm from being sued. Remember to implement strong calendar and conflicts of interest protocols.  Also, perhaps my top risk management tip is to document, document, document. Your client will be happier with frequent communication and any misunderstandings will likely be caught sooner.  Practicing with risk management in mind will benefit not only your client, but also your practice.

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