The Defining Moment of a Malpractice Claim

The Defining Moment of a Malpractice Claim

As a risk manager for the past 20 years, I’ve had more conversations with lawyers than I can keep track of and that were about more topics than I can remember. Of course, because I work for a legal malpractice insurer, it should come as no surprise that a number of the ones I do remember were about malpractice missteps. Of these, some were driven by a desire to look for the learning, others were about trying to determine if a misstep had even occurred, and every once in a while, they were about a lawyer regretting not having appropriately dealt with the misstep that did occur.

Claims can and, for many lawyers, will arise at some point during their careers. Client had a business deal go south, blames the lawyer. Client had to face an unexpected outcome, eventually realized she made a wrong decision, or just didn’t like losing, blames the lawyer. Heck even adverse parties, third parties, and non-clients sometimes try to blame the lawyer. It happens; but what if it happens to you? How do you think you would respond? This is worth thinking about because I don’t want to see you eventually end up on a call with someone like me, full of regrets over what you did or didn’t do. Here’s just one reason why.

A number of years ago, I took a call from a solo practitioner who was nearing retirement. The retirement years were to have been his best years yet because his plaintiff practice had been quite successful. He was an esteemed member of the bar and had become something of a pillar in the community. In fact, his reputation of helping others and being of service to the community at large was above reproach, that is, until it all went horribly wrong.

Two years or so before calling me, this lawyer was handling a personal injury matter. It was nothing out of the ordinary and one of hundreds upon hundreds of similar matters he had successfully resolved over the years. I never did learn how the statute got blown on the particular file he was calling about because it really didn’t matter. What mattered was that it was blown and this lawyer just couldn’t manage to face the problem head on. He felt embarrassed and disappointed in himself. I imagined that he simply couldn’t stand to look at himself in the mirror. To make matters right, in his mind, he made a decision to “settle” the matter. He contacted the client and explained that an offer was on the table. While the amount wasn’t quite what he had hoped to obtain, it was a reasonable offer. The client was appreciative of his efforts and agreed to settle her claim for the offered amount. This lawyer then personally paid the “offered” amount out of his own funds and the file was closed and put to rest.

Now, fast forward to his call to me. Long story short is this. His attempt to cover up the blown deadline eventually came to light and a malpractice claim was filed. Of course, due to the extremely late notice coupled with his past actions, (not the least of which included signing a warranty statement on an application to keep his malpractice insurance policy in force that stated he was not aware of any acts, errors or omissions that could reasonably be expected to give rise to a claim), not only was coverage denied but he also lost all prior acts coverage due to the policy being rescinded. This meant that he would no longer have any malpractice insurance coverage for any of the work he had done over the life of his practice. Sadly, this wasn’t then end of it. A disciplinary complaint was also filed and he eventually had his license suspended. One misguided decision changed everything. Retirement was thrust upon him and what were to have been the good years began in shame and devastation.

With this story in mind, I would have you think about how you might have responded. What would you do if you discovered that a serious misstep had occurred on one of your files? As the guy on the other end of the line on these calls, here’s the best advice I can share. Remember that people are not defined by the circumstances in which they find themselves. They are defined by how they choose to respond to their circumstances. Stated another way, in response to a potential claim, be the professional you are.

With any potential misstep, never ignore it! Unlike fine wine, viable claims don’t age well. Start here. Find your malpractice policy and review it. You need to be aware of what the notice requirements are in order to comply with them. Segregate the file and make sure everything in it is preserved, and I mean everything, all email, all notes, all drafts, all correspondence, everything. Open a new file to keep track of all communications with your insurance carrier and new lawyer. Contact your carrier directly and provide written notice, detailing the circumstances of the problem. This is not the time to be vague, to blame the client, or to worry about a possible rate increase. Also, do not discuss the problem with your client until contacting your carrier. Most importantly, let the professionals who handle malpractice claims day in and day out do their job. Don’t let your ego get in the way. Cooperate, take their advice, and listen because sometimes it’s even possible for another lawyer to do claims repair and the matter goes away.

If you don’t have a malpractice insurance policy, don’t try to act as your own advocate. The conflict issues that come into play can get messy fast and your professional judgment is clouded. Hire a lawyer who has experience in defending lawyers then step into the shoes of a client and stay there! I know it can be hard to take the lawyer hat off; but this is the one time where you really can’t afford not to.

I do understand how the lawyer in my story above felt. He wasn’t a bad guy. In his mind, he really was trying to right the wrong. He just lost sight of what truly mattered. Anyone can make a mistake. It happens. However, should it ever happen to you, think about this story and remember that what really matters, what people will end up remembering, is not the misstep itself but what you did or didn’t do in response.

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Since 1998, Mark Bassingthwaighte, Esq. has been a Risk Manager with ALPS, an attorney’s professional liability insurance carrier. In his tenure with the company, Mr. Bassingthwaighte has conducted over 1200 law firm risk management assessment visits, presented over 550 continuing legal education seminars throughout the United States, and written extensively on risk management, ethics, and technology. Mr. Bassingthwaighte is a member of the State Bar of Montana as well as the American Bar Association where he currently sits on the ABA Center for Professional Responsibility’s Conference Planning Committee. He received his J.D. from Drake University Law School.