Legal Developments and Risk Management Tips Impacting the Professional Liability Community.
An architect faces criminal manslaughter charges arising from the death of an LA firefighter who died attempting to control a blaze that engulfed the defendant architect’s multi-million dollar home. This case raises an unprecedented issue: Can defective design lead to criminal liability? Apparently, the answer is “yes” if the defect is the result of gross negligence.
A recent South Dakota Supreme Court decision serves as a reminder of some of the ethical issues and pitfalls when representing an elderly client. Unlike some of our posts which apply to a particular specialty, the potential for hiccups arising from representing the elderly impacts all professionals: accountants and attorneys, real estate professionals, brokers of all sorts, to name a few. The lesson is often the same: be particularly wary when representing an elderly client to avoid a potential malpractice suit or ethical problem.
With tax season upon us, tax professionals may cringe at another example of the potential for malpractice arising from questionable tax advice. However, America’s Oldest Brewery is in the midst of a very public dispute with the City of Brotherly Love regarding allegedly unpaid taxes. The City of Philadelphia recently sued Yuengling in an attempt to recover $6.6 million in back taxes, interest, and penalties allegedly owed to the City. Although Yuengling is located outside of Philadelphia, the City contends that the brewery failed to pay a tax imposed on entities that regularly conduct business in the City. Yuengling has vowed to vigorously defend itself in this lawsuit.
In a recently published amicus opinion, the ABA took a stand for its position that the attorney-client privilege should protect from disclosure communications between an attorney and her in-house counsel, even if the two attorneys are colleagues. In most scenarios, inter-office communications are discoverable. Privilege may not apply when attorneys consult amongst themselves. On the other end of the spectrum, consultation between client and outside counsel is usually protected from disclosure. However, the ABA’s recent amicus opinion focuses on the narrow situation when an attorney consults with a member of her firm’s designated in-house counsel. Read on for the ABA’s argument.
A recent decision before the Nevada Supreme Court highlights the importance of timely reporting all claims. The issue: is a carrier’s “constructive notice” of a potential claim sufficient to trigger coverage? Lesson: all professionals must have a firm grasp of the reporting requirements under their professional malpractice policy or risk denial of coverage. The Nevada Supreme Court’s decision in Physicians Insurance Co. v. Williams raises the all-important question: must all professionals, even pill-poppers and cocaine abusers, provide their insurance representative with timely notice of a claim? This decision also clarifies that the reporting requirement is not excused even if the insurer had independently learned of a potential claim.
We avoided the fiscal cliff. That is old news and, for most Americans, it is also good news. But, the developing fallout and the impact of Congresses’ eleventh-hour solution has particular implications on accountants gearing up for tax season. On January 2, 2013 Congress enacted the American Taxpayer Relief Act of 2012; a fiscal cliff tax package whopper which effectively changed the rule-book. At a time of year when accountants across the country are typically saying “so long” to their families to prepare for the hibernation that is tax-season, this year’s crop of tax-preparers is stuck in its tracks waiting for the IRS to issue updated software. From a professional liability and risk management standpoint, this is troublesome.
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.
Cases provided courtesy of LexisNexis.
All professionals must maintain and follow a clearly documented record retention policy. These policies are more stringent and regulated for some professions. Each of the 50 states maintain regulations governing work-paper ownership and record retention for accountants, for example. Attorneys, too, may be guided by fairly specific record retention policies pursuant to the applicable Rules of Professional Conduct governing lawyers state-by-state. Despite these regulations, all classes of professionals routinely face legal woes as a result of poor record retention compliance. This risk intensifies as a result of cyber risk and associated liability from electronically stored information.
In a recent consent agreement reached with the Florida Bar Association, Attorney Marshall C. Watson, was suspended for 91 days and agreed to shut down his legal practice for his role in operating a foreclosure mill. The issue: may an attorney be held personally responsible for his oversight of a large foreclosure mill? The lesson: even when an attorney’s work-product is not technically negligent, she may still be in violation of ethical rules and subject to strict discipline.