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Bar News - May 15, 2009

Do Malpractice Claims Increase in Tough Economic Times?


The answer is, we donít know yet, but claims were on the rise even before the economy turned for the worse in 2008.


A recent ABA study of claims filed between 2004 and 2007 showed a total increase of more than 36 percent compared to the previous three-year period.  However, the ABA attributes much of that increase to the fact that more law firms and insurers reported cases to the researchers.  Still, these latest numbers donít reflect the current recession.


While you may feel you have nothing to fear since your practice areas donít involve areas of law many blame for the economic collapse, that belief may be unfounded.


Clients, desperate to stay afloat, may be more inclined to sue their lawyers, hoping that the litigation will solve their financial problems.  Lawyers are also more likely to sue clients for fees during a recession, resulting in a counterclaim for malpractice.  An increase in the number of foreclosures may mean people are unhappy with related legal services and insolvent clients always pose a malpractice risk for lawyers.


To protect yourself from claims, always think twice (or more!) before suing a client for fees; donít dabble in unfamiliar areas of practice; document activities and confirm everything in writing. If you have a risk management question, most malpractice insurance companies have a hotline you can call for assistance and/or advice.

If you are in doubt about the status of any meeting, please call the Bar Center at 603-224-6942 before you head out.

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