Legal Developments and Risk Management Tips Impacting the Professional Liability Community.
The general rule: attorneys are not liable to non-clients. Accordingly, apart from limited exceptions, privity is required to pursue a malpractice claim against an attorney. Despite this rule, plenty of non-clients file suit against attorneys. Are courts receptive to these all-too-common claims? A recent decision reinforces the general principle that privity is a must to proceed against an attorney.
As you’ve no doubt heard, hackers recently accessed dozens of female celebrities’ personal cloud-based storage accounts, releasing hundreds of nude photographs and videos onto the web. Many of the photographs were taken by cell phones, which automatically backed up the files to popular cloud services, such as iCloud and Dropbox. Some suspect that the hackers then employed targeted attacks in which “brute force” programs were used to randomly guess weak passwords for a given username until it found a match. Once inside the celebrities’ cloud accounts, the hackers could access all manner of personal information. This is how many criminals operate today and all professionals should pay attention.
Attorneys have an obligation to provide zealous advocacy on behalf of their clients and to pursue a client’s interests within the bounds of the law. We recently posted an example of an attorney that crossed the line. Here’s another example which resulted in sanctions imposed upon an attorney for discovery abuse. In both cases, sanctions were levied against attorneys defending a deposition. Accordingly, we’ll take the opportunity to provide some tips to avoid a similar result in your practice.
The best is not always good enough. Clients sue their professionals, whether justified or not. So, while there is no way to eliminate malpractice exposure, there are plenty of steps to avoid or help to defend such a suit. One of the golden rules of risk management is to properly maintain a written record of communications with the client. In particular, documentation is especially important when the client and professional may disagree. A well-documented file will not prevent all lawsuits but, as exemplified in a recent New Jersey decision, may serve as a dispositive defense during litigation.
Generally, we’re encouraged to share, to cooperate, and to collaborate. But, that’s not always the case for lawyers. Attorneys may shy away from these niceties because open communication may result in the unintended disclosure of non-public information during discovery. The attorney-client privilege obviously protects those communications between professional and client. The common-interest privilege goes further. The common-interest privilege protects the confidentiality of communications passing amongst attorneys for different parties, often in the context of a joint defense effort. This privilege affords all parties the opportunity for open communication, in turn enabling counsel to strategize in anticipation of or in the course of litigation. This privilege was significantly expanded in a recent decision out of New Jersey which expressly adopted broad confidentiality protections in the common interest scenario.
Some professionals are regularly presented with the opportunity to engage in business ventures with their clients. Whether the professional is retained to review an investment opportunity for a client, provides advice regarding a client’s business, or invites a client to invest in a new venture, professionals may occasionally find themselves transitioning from the role of advisor, into that of a business partner. However, blurring the line between professional advisor and partner can easily lead to ethics violations and civil liability.
Today, everyone is a potential news source. Through a handheld device we can instantaneously upload photographs or content via social media to be delivered to an anonymous (and often eager) audience. In a sense, the world is shrinking due to instant access and connectivity. This technology has impacted the way we prosecute and defend cases. It plays into our strategy. Some attorneys use technology in an attempt to strengthen their case. But there are risks and limits. Take for example the Texas attorney who used Twitter to gain an arguably improper advantage.
The security of confidential information is an increasingly hot topic in the age of cloud-based commerce. Indeed, the all-important attorney-client privilege could be subject to waiver if confidential information is revealed to a third party. Yet, in the age of e-communications, almost all contact between attorney and client involves a third party. Consider the Dropbox program for example, which is utilized by many professionals to store client and case information in the cloud. Does the attorney-client privilege still apply given that this third-party may have access to confidential materials stored in the program? Perhaps you’ve overlooked the danger that cloud based storage constitutes a disclosure of confidential information and constitutes a waiver of any privilege.
There is no upside to failing to report a claim. You’ve been warned of the consequences facing professionals who take a wait and see approach or apply self-help measures before reporting. In some cases the professional may consider the claim meritless and therefore think that it doesn’t give rise to a “reportable” event. Other professionals, usually attorneys, may attempt to handle the claim on their own before notifying the carrier. In these scenarios, the carrier may elect to deny coverage and the insured is left to pay the bill. An interesting wrinkle to this theme may apply when the insured is represented by counsel before or during an event that may trigger coverage. What reporting responsibility falls on counsel?
Attorneys have an obligation to provide zealous advocacy on behalf of their clients and to pursue a client’s interests within the bounds of the law. To this end, lawyers are expected to protect clients during discovery by properly counseling them in anticipation of depositions and objecting to requests that are truly improper without crossing the line. However, overzealous advocacy, which obstructs legitimate discovery requests, may draw judicial ire and potentially lead to disciplinary action. Consider the following example.