Professional Liability Monthly – October Edition is Now Available
The October edition of Professional Liability Monthly is now available for download. Please click the continue reading link below to access the newsletter.
LATEST INSIGHTS
Cases for Professional Liability Monthly – October 2013 Edition
The below cases correspond with the October edition of Professional Liability Monthly and the analysis of each case.
The Ethics of Billing During Travel
Client billing and fee disputes are at the heart of a significant percentage of all malpractice claims brought against attorneys each year. There are myriad courses and guides for ethical billing available for all professionals yet lawsuits and administrative complaints abound regarding billing issues. However, even the most well-intentioned attorneys encounter situations where the “rules” of client billing are not crystal clear; perhaps none moreso than the debate regarding billing for travel.
Eroding Policy Limits Spur Litigation
Professional liability insurance policies each contain limits of liability that set the upper threshold that the insurer will fund. However, a policy’s stated limit does not necessarily correlate to the amount that will be available to resolve a claim. Instead, many policies provide that the costs of defense are included within the coverage limit—every dollar spent on defense correspondingly erodes the amount available to resolve the claim. These so-called eroding limits, or defense-within-limits policies become particularly important in heavily litigated cases, where high defense costs can approach, and sometimes surpass, the total limit of liability.
A-Rod Sues Yankees Doc For Malpractice
In the midst of his appeal of a 211-game suspension arising from the alleged use of performance enhancing drugs, Alex Rodriguez just filed the anticipated malpractice suit against a Yankees’ team physician. Professional Liability Matters posted of the rumblings of a malpractice suit in August. Now, the other shoe dropped. Although the allegations are serious, many speculate that A-Rod’s real goal of this lawsuit is to distract from A-Rod’s steroid controversy and to deflect blame.
Stop; Hammer (Clause) Time
Litigation is big business with big dollar signs. As a result of the large awards that can result from malpractice suits, many professionals, their attorneys, and insurers are interested in early settlement discussions. When considering settlement, the defense team must balance “right and wrong,” pride, defense costs, and other complicated factors that are difficult to quantify. For the professional, the decision may be more about reputation and morals than budgets. As a result, insureds may not always want to follow their insurer’s inclination to settle. Enter the “hammer clause.”
Hefty Audit Malpractice Case Dismissed due to Lack of Reliance
It is inevitable that blame will be cast on the auditor: when an investment tanks, when embezzlement is discovered, when stocks take a plunge. It is the independent auditor that concluded that the financial statements were presented fairly and therefore the auditor should have uncovered the ______________. Many plaintiffs follow this script. As a result, the defending auditor is left to argue that he is not responsible for the intentional acts of others or unforeseen changes in the underlying client’s business. This defense requires a fact intensive debate and the involvement of CPA experts; i.e. it’s expensive. A recent decision out of California, however, provides a strong argument for auditors that the plaintiff must establish actual reliance on the audit report in order to prove a claim.
Certificate of Merit Blunder Results in Dismissal
A growing number of states have enacted some version of an “affidavit of merit” statute in professional malpractice matters. The intended purpose behind these laws is to reduce “unnecessary” or unsupported lawsuits. In states such as Pennsylvania, New Jersey, and others, plaintiffs in malpractice litigation must certify through an impartial professional in the defendant’s field that there is a fundamental basis for the complaint. While the specifics of the particular statute in each state may differ in terms of scope and application, the importance of compliance cannot be overstated. A pro se litigant in New Jersey recently learned this lesson the hard way.
A Significant Blow to Med-Mal Reform
Medical malpractice reform has been on virtually ever state’s legislative agenda for the past several years as a result of a concerted effort by the defense bar and public interest groups to insulate physicians from frivolous suits. In an effort to curb rising healthcare costs, a variety of legislation imposing prerequisites on medical malpractice suits has been passed by a number of states. Rather than simply imposing damages “caps,” some states are getting creative with their reform legislation. However, a recent decision by a Florida federal judge dealt a major blow to those efforts.
Arbitrator’s Conflict Voids Arbitration Award
We previously warned of the risk that settlements purportedly achieved at mediation may unhinge due to the failure to document the settlement terms. Along those lines, a recent decision highlights the effect of an arbitrator’s failure to disclose his connection to a party. Many attorneys are chosen as an arbitrator due to their reputation in the community or personal/business relationships. Accordingly, there may be some heightened risks of potential conflicts, as seen here.