Professional Liability Matters

LATEST INSIGHTS

January 21, 2016 • Cyber-Liability, Professional Liability Matters

Liability for Failing to Prevent Cyber Risk

Cyber liability threats continue to pose a danger for companies and professionals. In order to help mitigate the damages of cyber breaches, businesses are becoming increasingly reliant on third-party security vendors to provide cyber consulting and to manage their data security risks. While prioritizing data security is an important step for firms to take to minimize their own exposure, it is not always possible to eliminate threats entirely. And when breaches do occur, businesses and their customers may look to hold these third-party data security companies accountable for failing to prevent attacks.

January 20, 2016 • Employment Practices Liability, Professional Liability Matters

Pitfalls of Arbitration Clauses in Employee Handbooks

An employee handbook is a necessary and familiar workplace fixture. A recent trend among employers is the inclusion of a mandatory arbitration clause, to avoid a jury trial in the event of employment-related litigation. Both state and federal courts have recently grappled with the validity of arbitration clauses in the employment litigation realm, and have both concluded that such clauses are not enforceable. These cases serve as a reminder that an employer must be vigilant should it wish to make such a clause part of its employment policies.

January 19, 2016 • Defenses, Professional Liability Matters

Malpractice in Disguise? Affidavit of Merit Requirement Tested

As you are undoubtedly aware, Professional Liability Matters previously circulated this handy table addressing the various affidavit of merit requirements throughout the country. Generally, in jurisdictions that require it, an affidavit of merit is necessary in order to maintain a malpractice claim against specified professionals, often including attorneys. But what is a “malpractice claim”? Suing a professional does not always equal malpractice. For example, a claim for malicious use of process is based upon a different standard than negligence. So this raises the question, is an affidavit of merit still required? In a case of first impression, a New Jersey Appeals Court recently ruled that it is not.

January 14, 2016 • Defenses, Medical Malpractice, Professional Liability Matters

Professional Liability to Strangers

Professionals owe their clients a duty to exercise the care, diligence, and skill expected of others in their profession in similar circumstances. Generally, the professional-client relationship defines the scope of this duty of care. However, in certain circumstances, the professional’s duty may extend to third parties, even complete strangers to the professional relationship. This is where things get tricky.

January 6, 2016 • Employment Practices Liability, Professional Liability Matters

Bathroom (Unpaid) Break: FLSA Foul Up

A dispute over unpaid bathroom break time at the office has resulted in an employer flushing away some $1.75 million as a result of violating the FLSA. The case arose when the Labor Department filed suit against a publisher after discovering that its employees were not earning the $7.25 hourly minimum wage during “personal breaks.” Pursuant to the employer’s policy, employees were required to clock out while using the bathroom, getting a drink or similar breaks.

January 5, 2016 • Conflicts, Legal Malpractice, Professional Liability Matters

What’s Adverse? Conflicting Clients Considered

The Model Rules of Professional Conduct prevent lawyers from representing conflicting clients. A conflict of interest may arise when the representation of one client will be directly adverse to another client. Just how far the requirement of “directly adverse” may extend was recently addressed by the Massachusetts Supreme Court in an interesting case involving IP litigation. While one inventor retained Firm to represent him on screwless eyeglass hinges another inventor had already retained Firm to secure a related patent in the screwless eyeglass market. Read on to see who got screwed.

December 29, 2015 • Coverage, Insurance Products, Professional Liability Matters

Insurance Applications + Lies = Coverage Denied

Insurers are entitled to make decisions as to the professionals they will insure and the terms of the relationship. To that end, insurers expend considerable energy evaluating risks and assessing the likelihood of a potential claim. The scope of underwriting and the key metrics may vary from carrier to carrier but without exception each insurer relies upon some form of insurance application. Insurers are entitled to rely upon the representations of their applicants and, when faced with a misrepresentation in an insurance application, have the right to deny coverage. Accordingly, we’ve cited previous examples of applicants caught in a lie in their insurance applications. Don’t do it. Consider another recent example.

December 22, 2015 • Ethics, Legal Malpractice, Professional Liability Matters

Partner? Associate? Of Counsel? Does it Matter for Conflict Purposes?

Pursuant to ABA Model Rule 1.10, a single attorney’s conflict of interest may be imputed to the entire law firm. The Rule provides that while lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so under the Rules. It is not uncommon for lawyers to have different associations with a particular firm—for example the term “of counsel” is often used to designate a role different from the traditional partner or associate positions. This may beg the question what level of involvement must an attorney have in order to be “associated with” a particular firm for conflicts purposes. A recent case out of the U.S. District Court of New Jersey involving a “seconded” attorney addressed just this issue.

December 18, 2015 • Employment Practices Liability, Law Practice Management, Professional Liability Matters

Professional Liability for Employee Misconduct

Professionals are often entrusted with access to personal and financial information from their clients. Professionals take great care to ensure that they protect this information from disclosure and that they comply with ethical guidelines regarding proper use of client funds. However, even when professionals fully comply with the rules, there may be occasions where employees or other individuals who have access to the information through their professional employer use it for an improper purpose. While professionals cannot always prevent employee misconduct, the actions they take to remedy any misdeed can often mean the difference in assessing personal liability.

December 16, 2015 • Professional Liability Matters, Risk Management, Sanctions

Abuse of Process Examined

Combating bullies has recently become a trending topic, particularly with the rise of bullying on social media. However, in the legal world, bullies also run the risk of being sanctioned, as a recent fashion copyright infringement case illustrates. The suit, filed by graffiti artist RIME against fashion label Moschino, alleges illegal copying of a design. In response to the designers’ motion to dismiss, RIME filed its own motion, based in part on abuse of process. According to RIME, the designers’ motion to dismiss is a tactical and intentional attempt to scare and burden RIME in the hope that he will retract his lawsuit.