Malpractice lawsuits can be so damaging that several prestigious law firms have gone out of business throughout the US, mainly due to some unfortunate but costly errors that ultimately led to the demise of these firms. Lawyers end up losing their jobs and, in some instances, their licenses.
Part of the surviving this onslaught of litigation is through proper insurance coverage. To offset the costs of any litigation aimed at a firm, organizations need to carry attorney professional liability insurance as a means to repairing any damages resulting from litigation and many of the huge settlements being brought against these firms.
The cause and effect of a malpractice suit
One of the most common of all malpractice errors that lawyers commit is failing to know or apply substantive law. The fact is that no single error accounts for the majority of these types of claims, although in general, the substantive-related kinds are responsible for quite a few lawsuits.
Administrative and client relations errors are among the main causes of client mistrust and can lead to acts of litigation citing any number of wrongdoings. Understanding where and why claims happen can certainly help an agency proactively take steps to reduce the likelihood that a claim will be made against the firm or one of its practitioners. However, to accomplish this it may be helpful to understand reasons for malpractice claims in general.
When grouped together, substantive-type errors account for over 46 percent of reported claims in a recent lawyer professional liability (LPL) study. Another rather obvious error is the failure to know or ascertain a deadline (as in a limitation period). Additional substantive-type errors include planning errors regarding choice of procedure, errors in public record searches, failure to anticipate tax consequences, and inadequate investigation or discovery of fact, to name a few.
Lawyers need to tread carefully when giving advice to clients or working on matters relating to law for a state where they aren’t admitted. Another critical issue is giving legal advice tailored to specific circumstances of a client, where the attorney might not take the time necessary to obtain all the needed information as well as ask appropriate questions on the matter. Whatever the reason, attorney professional liability insurance can prevent a firm from losing everything they’ve worked so hard to build and establish.