Professional Liability Matters

LATEST INSIGHTS

April 16, 2013 • Engagement Letters, Professional Liability Matters

Avoiding the Courtroom through a Mediation Clause

Litigation costs are higher today than ever. A recent Duke University survey revealed that litigation costs continue to rise and are consuming an increasing percentage of US corporate revenue. Since 2000, litigation costs have increased 73% and that increase is not due to higher hourly rates but rather more lawsuits. What is the takeaway for you Mr./Ms. Professional? Stay out of the courtroom! You’re reading Professional Liability Matters so you have adopted some risk management savvy but inevitably you are likely to confront some dispute despite your best efforts. Accordingly, your engagement letter and particularly a well-tailored mediation/arbitration clause may be the perfect safety net.

Firing Problem Employees: A How-To Guide

“They come into work disheveled and drunk. They swear while talking to customers. They have sex with a co-worker in the stockroom. Or worse yet, they steal money from the company or threaten to hurt the boss. Some employees turn out to be bad news for a company and need to be fired, but how can a company show misbehaving workers the door while protecting itself from wrongful termination or discrimination suits?” Our friends at Law360 provide great insight on the difficult and risky task of terminating an employee, here.

April 10, 2013 • Ethics, Professional Liability Matters

What’s the Going Rate to Buy a Witness? About $10,000 an Hour…

Parties are free to pay fact witnesses exorbitant fees, according to New York’s highest court, so long as the jury is alerted to the potential for bias. In a recent decision before the New York Appellate Division, an orthopedic surgeon received $10,000 to testify against a woman he treated after she allegedly fell while walking her dog in Peekskill, New York. Notably, the surgeon did not provide expert advice, rather he received the hefty sum to merely recount for the jury his conversations with the plaintiff during his examination. This raises some concerns regarding ethical treatment of witnesses.

April 9, 2013 • Legal Malpractice, Professional Liability Matters, Risk Management

Rutgers: Don’t Look at Me…My Lawyer Made Me Do It

As is so often the case, with mounting pressure and criticism comes finger-pointing. In the midst of a well-publicized scandal, Rutgers University is now suggesting that poor advice from its outside counsel led to a series of infamous decisions regarding its former basketball coach. According to reports, as Rutgers’ athletic director Tim Pernetti resigned Friday amid the scandal over men’s basketball coach Mike Rice’s unorthodox practices, he blamed the school administration for following a “process” that allowed Rice to stay on-board. With its back against the wall, Rutgers laid part of the blame on the Roseland, New Jersey law firm that allegedly balked at recommending Rice’s termination.

April 4, 2013 • Ethics, Legal Malpractice, Professional Liability Matters

When Professional Misconduct = Unfair Trade Practices

The California Court of Appeals recently concluded that professional malpractice and ethical violations may give rise to liability for unfair trade practices. In the underlying dispute, attorney Martin Guajardo, the sole shareholder in his own law firm, sold his practice because he faced disciplinary action brought by the state bar. Although Attorney Guajardo ultimately resigned from the bar, he continued to practice law following the sale of his firm. The People of the State of California filed a complaint against Guajardo, and the new firm, alleging unlawful, unfair, and deceptive business practices based upon Guajardo’s unauthorized practice of law. On appeal, the court concluded that Guajardo’s ethical violations also supported a claim under the state’s unfair trade practices act.

April 3, 2013 • Employment Practices Liability, Professional Liability Matters

A Case Study for Employers on Whistleblower Laws

Whistleblower laws are generally designed to prohibit employers from taking retaliatory action against an employee because the employee engages in protected conduct. For example, an employer may not retaliate against an employee for disclosing the employer’s violation of laws or ethics, providing testimony about the employer, or refusing to engage in inappropriate conduct. In a …

April 2, 2013 • Cyber-Liability, Professional Liability Matters

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, Professional Liability Matters, 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.