Legal Developments and Risk Management Tips Impacting the Professional Liability Community.
Have you heard of the “Pharma Bro”; the CEO who, according to reports, notoriously purchased a drug used to treat AIDS patients only to dramatically increase its price? He’s made considerable press recently and now he’s turning on his lawyers. In a recent hearing, lawyers for pharmaceutical hedge fund manager Martin Shkreli requested a delay in scheduling trial as they contemplate asserting “reliance of counsel” as a defense.
Employee wellness plans are a hot item these days. Increasingly, wellness plans are seen as a benefit to both employees and employers alike. As many employers jump on the bandwagon of this growing health trend, they should be aware of the other legal implications of creating and implementing these programs within their company. For example, a popular topic ever since the EEOC issued its proposed regulations last year has been how employee wellness programs can comply with existing regulations such as the ADA and Title II of the Genetic Information Nondiscrimination Act (GINA). Well now it’s time for employers to take note because the EEOC has just finalized its rules in this regard.
It’s just business, right? Not when it comes to the ethical and professional requirements associated with the transition to a new professional practice. Many professionals are seeking to expand their practice, or move, or add partners in an effort to acquire new talent. Some firms are streamlining and shrinking their practice. Under the right circumstances, departures may lead to mutually beneficial business opportunities for the departing professional and the former firm. In other cases, however, the actions taken by departing professionals could lead to costly litigation.
Many professionals are bound by a code of professional conduct. Sure, we have to play by the rules but those rules may require that we ensure others do as well. In a recent opinion, the Supreme Court of Ohio Board of Professional Conduct considered the circumstances in which an attorney is required to report rule violations by others. The Board addresses two specific questions in its opinion: (a) whether a lawyer prosecuting a malpractice case is obligated to report the defendant lawyer to the disciplinary authority and (b) whether the information acquired form the client regarding their prior lawyer’s conduct is privileged, thereby eliminating any duty to report.
The concern for the public’s trust in the legal profession remains a core goal of attorney ethics committees nationwide. Especially with the ease of accessing confidential information, attorney’s protection of client data has truly come into focus in recent years. This week, the Kentucky Supreme Court will decide whether an attorney will be permitted to continue his career in light of allegations that he used confidential client information to complete insider trades. The Kentucky Board of Professional Conduct recommended that the attorney be suspended for two years.
New Jersey is known for its beaches and its tomatoes. In the malpractice community, New Jersey is also known for its unique rules on fee shifting. New Jersey allows successful litigants in attorney malpractice suits to recover as consequential damages the legal expenses and attorneys’ fees they incur in prosecuting the claim. We previously reported on the case of Innes v. Marzano-Lesnevich, pending before the New Jersey Supreme Court that could potentially expand the rules on fee shifting in malpractice cases. Well, the New Jersey Supreme Court has spoken and any attorney practicing in New Jersey should be aware of the outcome.
Fee sharing is not unfamiliar to most attorneys. Model Rule of Professional Conduct 1.5(e) permits lawyers who are not in the same firm to share or divide a fee. A typical example is when an attorney refers a case out to “trial counsel”. But, fee sharing has its restrictions. For example, the Model Rules permit fee sharing only when the fee is reasonable, the client agrees to the arrangement and the division of the fee is proportionate to the share of each lawyer’s services or the lawyers assume joint responsibility for the representation. These requirements create ethical implications for lawyers engaged in fee sharing. Fortunately, the ABA recently provided some guidance.
Professionals depend on third-party email services to operate their business. As a result, professionals may assume that the vendor is safeguarding their electronic information and therefore the professional is not exposed. False. Consider an attorney sued recently for malpractice arising from an e-mail hacking scam.
What is a “professional liability” claim? Most definitions would include a claim involving a skilled professional – such as an attorney, accountant, doctor or broker – sued in her professional capacity, based upon allegations of negligence in the performance of professional services. The easiest example is a claim for legal malpractice: a client gets a negative or unexpected result, believes that this result is due to failings on the part of hired counsel, and subsequently brings a claim against his attorney for damages. Pretty cut and dry, right? Nope.
The Department of Labor recently announced its new Fiduciary Rule – aka the “conflicts of interest rule.” This new rule expands the definition of fiduciary and alters how investment advice is delivered in retirement accounts. It won’t go into effect for at least another year, but it’s not too early to start thinking about how the changes will affect the professionals who render this advice.