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Just the news that attorneys needed right now: According to insurance broker Ames & Gough, attorney malpractice claims increased in both number and cost in 2019. That trend is expected to continue in 2020, as law firms struggle to provide remote services to clients in difficult circumstances.
The number of malpractice claims filed rose 10% in 2019, according to the report, which analyzed 2019 malpractice data for approximately 80% of the largest law firms in the U.S. Equally alarming for law firms, the amount of damages awarded also increased. For example, two malpractice claims led to over $100 million in payouts, Reuters reported.
The causes of the increase remain speculative. However, some have pointed to fewer attorneys prepared to capably handle the high demands of complex litigation. With fewer cases going to trial overall, there are fewer experienced trial attorneys.
There is also increased scrutiny over bill padding, which has led to more claims. As attorney-client relationships become more transactional, particularly in Big Law, clients are looking at expenses and are more willing to sue outside counsel or their attorney over disputed charges.
Conflicts of interest claims (including perceived conflicts) remained the leading cause of malpractice lawsuits, with general negligence coming in second. This is in line with past years. The hardest-hit practice areas also remained the same, with business and commercial transactions, bankruptcies, and estate planning the most targeted.
Lawyers have enough to worry about during the pandemic, but the frequency and cost of attorney malpractice claims in 2019 is unlikely to decrease in 2020. With law firms and attorneys struggling to juggle client demands while working from home, an increase in malpractice claims is expected. Further, in hard economic times, clients are more likely to sue their counsel to recover costs. As you may have heard, we are living in difficult economic circumstances.
Meanwhile, attorneys should be sure to conduct thorough conflict checks, maintain regular communications with clients, and stay on top of deadlines. While these are all more difficult in the current environment, they are also necessary to avoid an expensive malpractice claim.