Professional Liability Matters

LATEST INSIGHTS

May 21, 2013 • Legal Malpractice, Professional Liability Matters

OJ Simpson’s Bid for Freedom: It’s My Lawyer’s Fault

OJ Simpson’s fall from fame is well documented. The disgraced football running back’s latest legal woes stem from an altercation in a hotel room in which the Juice was allegedly joined by armed men. That story ended with his incarceration. Now, OJ is back in a Las Vegas courtroom with a new team of attorneys and a novel argument: Simpson’s former attorney is to blame for the 2008 conviction. In the latest chapter in OJ’s lengthy legal history, the “Juice” claims that poor legal advice is the sole reason he was incarcerated.

May 20, 2013 • Professional Liability Matters, Risk Management

Failure to Disclose Jeopardizes Coverage in Hefty Malpractice Claim

A law firm’s failure to disclose a potential claim on its insurance application may act as a waiver of coverage. Lloyd’s of London recently argued that coverage did not apply to a California based law firm in a multi-million dollar legal malpractice action. According to Lloyd’s, the professional liability insurance policy contained an exclusion for claims the firm knew or reasonably should have known about prior to the effective date of the policy. At the time the law firm procured the policy, an attorney from the insured entered into a tolling agreement extending the statute of limitations on a potential malpractice claim. This pre-claim was not disclosed on the insurance application. That spells trouble.

May 16, 2013 • Cyber-Liability, Professional Liability Matters

Arrests Follow Massive, International Cyber-Heist

Recent arrests followed one of the more complex cyber attacks in history. $45 million was reportedly stolen in the blink of an eye but it may take years to comb through the unprecedented cyber-liability issues. Two major banks are now evaluating novel liability issues and presumably deciding whether to lodge a series of lawsuits with major implications on the landscape of cyber-liability.

May 15, 2013 • Legal Malpractice, Professional Liability Matters

Attorney Sued for Wrongful Death

One of the foundations of the attorney-client relationship is confidentiality. Apart from limited exceptions, attorneys are generally precluded from disclosing a client’s confidential information to a third-party and must act at all times in the client’s best interest. It is well established that failure to do so may constitute an ethical violation and perhaps professional misconduct. A recent $40 million lawsuit claims that an attorney’s breach of his client’s confidences led to the client’s murder. Uh oh.

May 14, 2013 • Accountants, Professional Liability Matters

Golfer Tees-Up Professional Malpractice Lawsuit

A professional golfer – with a famous ex-fiance – recently filed a professional malpractice claim against his former accountant for allegedly concealing unpaid taxes in excess of $500,000. Hank Kuehne is an amateur champion who last played in a major tournament at the 2012 Honda Classic, but is perhaps best known for his prior engagement to tennis great Venus Williams. Reportedly, Kuehne had no idea of his mounting tax liability until he fired his advisor and retained a new accountant to manage his portfolio. A classic example of poor communication leading to malpractice.

May 9, 2013 • Professional Liability Matters, Risk Management

Insurance Implications in the West, Texas Explosion

One million dollars of coverage for $100 million in losses? Unfortunately, that appears to be the case for the West, Texas fertilizer plant that recently exploded. Reportedly the owners of West Fertilizer Co. hold a negligible amount of insurance compared to the estimated cost of the damage caused by the blast. The plant did not hold excess or umbrella insurance policies. The fact that the company’s owner has not breached any applicable regulation has been the subject of heated debate on the national level regarding regulating mandatory insurance coverage for companies that handle hazardous materials.

May 8, 2013 • Legal Malpractice, Professional Liability Matters

Ignoring Prejudgment Interest = A Costly Mistake

Prejudgment interest awards are often overlooked in evaluating a claim, especially legal malpractice matters. Typically, when valuing exposure, the focus centers upon the underlying action had the attorney avoided alleged negligence. But overlooking the impact of prejudgment interest can prove to be a costly mistake. Depending upon the statutory interest rate in your jurisdiction and the potential amount of the award, prejudgment interest can transform a nuisance value malpractice case into a hefty judgment.

May 7, 2013 • Legal Malpractice, Professional Liability Matters, Real Estate Professionals

Real Estate Transactions Pose the Greatest Risk of Attorney Malpractice

According to a recent study, real estate transactions pose the most risk to attorneys of a malpractice claim. In its annual survey, the American Bar Association reported a higher percentage of professional liability claims stemming from real estate dealings than any other area. Over the past several years, plaintiff personal injury claims topped the list, but to the joy of the plaintiff’s bar and the chagrin of real estate professionals, that trend is apparently changing.

May 6, 2013 • Insurance Products, Professional Liability Matters

Insurance Blunder Costs Newest Philadelphia Eagles’ QB $11.5 Million

Quarterback Matt Barkley was selected by the Philadelphia Eagles with the 98th pick in the 2013 NFL draft. He was the fourth quarterback selected and was the first selection in the fourth round. History suggests that he will sign a four-year contract worth about $2.5 million. Sure, that’s a lot of dough, but not nearly what Barkley would have earned had he foregone his senior season at USC and entered the NFL draft in 2012. As a projected top-10 pick last year, Barkley would have made a minimum of $12 million guaranteed. His only guaranteed pay this year could be a signing bonus in the $500,000 range. Interesting reading, for some, but why does Professional Liability Matters care? Because Barkley could have purchased “draft insurance” last year which could have saved him millions.

May 2, 2013 • Risk Management

Former New Jersey Governor Sued for “Grossly Negligent” Conduct

Former New Jersey Governor Jon Corzine and other executives from MF Global were recently sued over the 2011 collapse of the commodity trading firm. In the suit, the bankruptcy trustee claims Corzine and others caused the firm to fail through a risky trading strategy and “grossly negligent” oversight. Corzine allegedly was aware that the trades were high risk, but failed to implement proper policies to protect the firm. In particular, the lawsuit contends Corzine breached his duties to the shareholders of MF Global and failed to act in good faith, allegedly causing the firm losses in excess of $1 billion. Corzine has vehemently denied the allegations and characterized the lawsuit as “a clear case of Monday Morning quarterbacking.”