High ticket legal malpractice claims are on the steady rise

On Behalf of | Jul 11, 2013 | Legal Malpractice Law

Legal malpractice consists of the failure of an attorney to use such skill, prudence and diligence as lawyers of ordinary skill and competence in the community would normally provide for the same or similar services. In New Jersey and elsewhere, if the attorney falls below that required standard of professional care under the circumstances, and if that legal malpractice is the substantial cause of damages, it gives rise to a tort action by the injured party against the ill-performing professional. Such claims are steadily growing, according to an annual survey conducted by an insurance broker.

Some of the larger malpractice insurers participated. According to the survey, multi-million dollar payouts are climbing, as well as claims in excess of $50 million. Thus, one major conclusion is that the number of large legal malpractice claims is increasing.

Most of the insurers had more new claims than they had last year. The poor economy caused part of the large numbers of claims. The recession of 2007 to 2009 created numerous claims that remain unresolved. In the recession, a rash of malpractice claims emerged around failed transactions and also failed litigation. In the latter, when suits against others failed, clients commonly acted against their attorneys.

Also, mergers and lateral hires caused a good part of the increases. When an attorney is hired from another, competing firm there’s a tendency to bring along clients from the prior firm, which causes potential lawsuits. The intense competition among the mid-sized and large law firms today means a greater necessity for both growth and survival, which has created a trend of mergers and the lateral hiring of attorneys. Lateral hired attorneys should be closely vetted and monitored for potential claims, including for self-dealing, conflict and disclosure issues.

Whether in New Jersey or another state, the most legal malpractice claims related to real estate issues. Trusts and estates ranked second and corporate law was third. Conflicts of interest continued to be most cited type of error. If you believe that you’ve suffered from legal malpractice, you’ll be well-advised to see counsel who is experienced in handling legal malpractice claims. That will help to provide you with accurate answers to your questions and with a timely explanation of your potential remedies and options.

Source: Insurance Journal, “Law Firms See Rise in Malpractice Claim Frequency, Severity,” June 27, 2013

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