Professional Liability Matters Archives

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April 2, 2013 • Cyber-Liability

Hollywood Heist Leads to Cyber Liability Suit

The fact pattern sounds like it was ripped from the pages of a Hollywood screenplay. Two criminals back a trailer to a pharmaceutical warehouse and cut a hole in the ceiling of the facility. They proceed to utilize the company’s own forklifts to load over $80 million in prescription drugs into the trailer and exit without detection on any security cameras. All told, authorities estimate that the heist represents the largest known theft of prescription drugs in US history. The last scene in this bizarre, real world thriller takes place in the Federal District Court of Connecticut where the parties are fighting the first cyber liability suit of its kind with major implications on the fiduciary responsibilities of data storage and security companies.

April 1, 2013 • Engagement Letters, Risk Management

A Disclaimer of Disclaimers – Limits on Limitation of Liability

Many classes of professionals utilize engagement letters with limitation of liability language. For example, accountants, real estate agents and home inspectors often include in their engagements a hold harmless or other clause with the goal of limiting potential damages. Such a clause will establish the extent of exposure, if any, that the professional can be held liable for should problems arise with the engagement. The question of whether the clause is enforceable is state specific and somewhat unpredictable.

March 28, 2013 • Risk Management

Malpractice Advice from Dr. Oz

Dr. Oz, a well known TV personality, was recently named in a New York lawsuit arising from on-air advice he provided to his viewers. The doctor allegedly informed his audience about a “heated rice” remedy for insomnia. Dr. Oz called it “my night sleep special” on the April 17, 2012, episode of his NBC show titled “Dr. Oz’s 24-Hour Ultimate Energy Boost Plan.” Unfortunately for 76-year-old Frank Dietl, that Boost Plan left him bedridden for weeks with severe burns on his feet. According to the lawsuit, Dr. Oz failed to provide proper warnings and instructions about the home remedy. The plaintiff seeks unspecified damages from Dr. Oz, NBC Studios, Sony Pictures Television and Harpo Productions.

March 28, 2013 • Professional Liability Monthly

Professional Liability Monthly – March Edition is Now Available

For a free copy of this month’s edition of Professional Liability Monthly, click here. To be added to our circulation list, where you will receive this publication for free each month via email, please contact Brian Biggie at bbiggie@goldbergsegalla.com.

March 27, 2013 • Director and Officer Liability

How Jerry Sandusky Impacts You

The evolving Jerry Sandusky scandal continues to impact the professional liability community. Most recently, the Middle District of Pennsylvania reached a decision with major implications on the application of D&O – Director’s and Officer’s Insurance. In deciding that Sandusky’s acts occurred outside the scope of his role with the Second Mile even though the conduct occurred during Second Mile events, the court may have also exposed directors and officers to increased risk of personal exposure.

March 25, 2013 • Legal Malpractice

My Lips Are Sealed: No Liability For Attorney’s Non-Disclosure to Non-Clients

Let’s start with the basic principle: an attorney’s duty runs exclusively to the client apart from limited circumstances of fraud when an attorney may be liable to the client’s adversary. The question remains whether an attorney’s decision to keep her mouth shut – i.e. not to disclose key information to the other side – constitutes actionable fraud. According to a recent decision by the Texas Appeals Court, the fact that an attorney did not disclose information to her adversary does not constitute actionable misconduct.

March 22, 2013 • Legal Malpractice

Attorney Sanctioned for Frivolous Claim

You are what you eat – but for lawyers, you are what you sign, file, verify or plead. An attorney in Pittsburgh just learned this lesson the hard way and is now $20,000 lighter in the wallet. The failure to properly investigate his client’s “frivolous” gun malfunction claim has landed Attorney Jason Schiffman with the hefty sanction after the judge disagreed with the attorney’s plea that he had reasonably relied on his client.

March 21, 2013 • Risk Management

NFL Star Considering Malpractice Suit

A recent contract negotiation blunder may result in a hefty malpractice claim by a professional football player against his agent. The former agent for NFL defensive end, Elvis Dumervil, is in hot water over his handling of Dumervil’s contract negotiations with the Denver Broncos. Due to his agent’s failure to timely transmit an executed contract to the team worth $8 million per year, Dumervil is unemployed and considering a suit.

March 19, 2013 • Accountants

Who Really Owns a CPA’s Working Papers?

Accountants are well aware that clients, former clients, and others periodically request (or sometimes demand) copies of the accountant’s work-papers. The question invariably is: who owns those materials? Moreover, what is the accountant obligated to turn over and what categories of materials may be withheld? An accountant, and those that represent them, must be aware of the critical legal and regulatory issues facing the accounting profession when handling such a request.