Professional Liability Matters

LATEST INSIGHTS

February 19, 2014 • Director and Officer Liability, Professional Liability Matters

D&O Suits Reach Historic High: Economy to Blame?

The fallout from the 2007-2010 economic downturn is behind us, right? Nope; not so for the professional malpractice community in light of the many lawsuits arising from the recent market collapse. In fact, lawsuits relating to 2007-10 bank collapses in particular have increased dramatically and the primary targets are executives. According to a February 13, 2014 report which is available here, litigation against directors and officers of failed banks reached an all-time high in 2013. To make matters worse, many of those directors were forced to reach into their own pockets to absorb the costs.

February 18, 2014 • Insurance Products, Professional Liability Matters, Risk Management

Double Covered but Uninsured

Prudent professionals maintain different types of insurance to protect against various risks. Some typical policies for professionals may include D&O, cyber, and/or E&O policies. The foregoing policies and others may overlap, while others allow gaps for claims that would not be covered. It is incumbent upon each professional to purchase the perfect mix applicable to her practice; there is no one size fits all and more is not necessarily sufficient. Although multiple policies may fit together seamlessly to form a safety net, other policies allow for gaps in coverage that could result in out-of-pocket exposure.

February 13, 2014 • Professional Liability Matters, Risk Management, Technology

The Risks of Auto-Reply Messages

One of the consequences of modern technological advances is that many expect 24/7 access to their employees and outside professionals. Today there is really no such thing as unreachable and there are fewer and fewer locales that are “off the grid.” 48 hours without responding to e-mail is not acceptable to some. As a result, when business travel, vacation, or other events preclude timely e-mail responses, many employees and professionals utilize the all-too-familiar auto-reply message. However, some experts suggest that these messages carry considerable security risks.

February 12, 2014 • Legal Malpractice, Professional Liability Matters, Technology

Inadvertent E-Discovery Disclosure Leads to Sanctions

Document production is often an arduous task made more so by e-discovery requirements. Electronically stored data results in exponentially more complicated, time-consuming and expensive discovery. Many law firms have protocols to efficiently handle e-discovery or they work with a vendor to lend a hand. However, recent decisions suggest that courts have heightened expectations and are less likely to overlook mistakes by firms who handle sensitive data. A recent decision out of California serves as a reminder that failure to follow reasonable e-discovery standards may result in sanctions.

February 6, 2014 • Employment Practices Liability, Professional Liability Matters

Illegal Formation? Raiders Cheerleaders Allege Wage & Hour Violations

A recent class action suit filed by two Oakland Raiders cheerleaders alleges that the NFL team violated labor laws, including paying less than minimum wage and illegally requiring them to pay expenses out of their per-game salaries. Add this to the fairly lengthy list of off-season concerns facing one of last season’s worst teams in football.

January 30, 2014 • Employment Practices Liability, Professional Liability Matters

Good Samaritan or Workplace Liability?

What to do? Your colleague begins to choke on his sandwich at lunch. The courier trips on loose carpet in your office lobby. Your co-worker goes into anaphylactic shock. What to do? Good Samaritan laws are designed to indemnify individuals who provide reasonable assistance to others in a time of emergency. The laws are intended to encourage assistance without fear of legal repercussion for unintentional injury or wrongful death. These laws have an interesting role in the office setting.

January 28, 2014 • Engagement Letters, Professional Liability Matters

Out of State Advice Leads to Out of State Liability

Professionals may be exposed to liability outside of their “home” state. For those professionals that provide interstate advice, they may be subject to the jurisdiction and laws of any state in which they practice. Take for example the recent legal malpractice case in which a Connecticut law firm was dragged into a lawsuit in Arizona because of allegedly negligent tax advice. Sure, the first rule is to avoid a lawsuit. But, a close second rule is to implement procedures such that the professional is in a better position to defend the inevitable lawsuit. A forum selection and choice of law clause may be the key.

January 22, 2014 • Legal Malpractice, Professional Liability Matters, Risk Management

Promptly Disclose…Don’t Promptly Confess

Professional Liability Matters would have little to discuss if professionals were perfect. Needless to say, we are not. Often, it is how the professional responds to the inevitable error that can mean the difference between soon forgotten mistake and malpractice. Upon the discovery of an error, some professionals are confronted with a difficult conflict: their interest in confronting the error and discussing it with the client on the one hand, without making an admission that could jeopardize insurance coverage on the other. This conundrum places the professional in a very difficult position.