|
The Nine Commandments Of Malpractice Prevention Practice Pointers INTRODUCTION An attorney can improve the chances of "beating the odds" by adhering to the following prescribed conduct - a set of nine commandments by which to manage your practice and behavior. The common element to each of the commandments is the crucial need to communicate - communicate with your clients and with those individuals who may perceive themselves as your clients. Communicate with your office staff, with co-counsel and with the courthouse. And, most importantly, maintain an honest dialogue with yourself, "This above all to thine own self be true, and it must follow as the day the night, that thou canst be false to any man." FORCES FUELING LEGAL MALPRACTICE Almost half of all claims arise from errors in substantive law - attorneys fail to know, or to understand, the applicable law governing their matter. Another quarter of all claims arise from administrative errors, the most common being failure to timely file, conflict of interest, failure to advise and failure to follow instructions. Interestingly, the size of firm is no indicator of the likely frequency of malpractice claims. While 96% of U.S. attorneys practice in firms of 1 to 5 lawyers, only 61% of all claims are filed against firms of this size. Firms of 11 or more lawyers account for 2% of all attorneys, but have 29% of all malpractice claims, and firms with more than 100 attorneys garner 14% of all claims. Behind the claims analysis looms a simple, but significant, head count - the U.S. population has grown 2.6% in the past three decades, while the number of U.S. lawyers has grown 7.1%. The rate of increase in the number of lawyers has practically been triple that of the general population. In 1970, statistically there was one lawyer for every 869 members of the general population. By 2000, it is estimated that there will be one lawyer for every 233 people. This dramatic increase in supply has not been offset by an equal increase in demand, contrary to popular public perception, there is no litigation explosion. To the contrary, with recent inroads made by tort reform, many personal injury lawyers have faced a significant decrease in potential cases. As in any area of commerce, too much supply upsets the equilibrium, resulting in an unstable market for those providing legal services. It is, therefore, all too predictable that the economic forces felt by many in the legal profession today are great enough to lead to poor judgment, or worse. Many may feel that desperate economic times call for desperate acts of representation. This professional climate not only increases the incidence of malpractice, but also brings scrutiny to bear on just about every practicing lawyer. To better withstand the economic pressures, as well as the increased scrutiny to which your legal work may be subjected, the following commandments are offered. THE NINE COMMANDMENTS
1. Calendar Then, you must PAY ATTENTION to your calendar! From 1983-85 to 1990-95, claims arising from Failure to Calendar Properly were down by almost 5%, but claims for Failure to React to Calendar and Procrastination both increased, together accounting for 15% of all claims reported in 1990-95. The statistics suggest that more sophisticated calendar and docket systems are enabling & Koupal PC to keep better track of deadlines, but lawyers have become more likely to ignore their calendars. As previously observed, plaintiff's P.I. work has the highest frequency of claims for any field of law. File suit on such cases as soon as appropriate and permitted. In FTCA (Federal Tort Claims Act) or cases against the Sovereign, the attorney should file promptly after the expiration of any waiting period. In instances where a statute might expire during negotiations, protect your client by getting a written agreement, signed by the proposed defendant, not the attorney or insurer of the defendant, which tolls the statute until a fixed date, or until a period of time passes following a written acknowledgment of the failure of negotiations. The fields of practice with the second-highest frequency of claims are Real Estate (14.35%) and Business Transaction Commercial Law (10.66%). If your office handles these types of matters, it should always calendar commercial deadlines for clients for matters such as foreclosures, lease renewals, expiration of offers, and inspection deadlines. You will avoid innumerable problems if you make contemporaneous entries of your time in every case. In all types of cases, keep track of your time by using the equivalent of a DAYTIMER, Timeslip, or Electronic calendar. Your notes should include the matter done, any tasks to be accomplished, or decisions taken. 2. Communicate—routinely and in writing You should establish a practice of communicating with every client on a routine basis, then document the communication. Forward pertinent information to client promptly. See, Beis v. Bowers and XYZ Insurance Co., 94-0178 (La.App. 4 Cir. 1/19/95), 649 So.2d 1094. Court allowed claim for negligent infliction of emotional distress by client against attorney who failed to timely advise client of medical review panel's adverse decision. A regular practice of billing every active client at least monthly will help identify possible problems as well as to help avoid future client misunderstandings. Contingent fee clients should be included in the billing program, detailing their costs, expenses, and other advances, whether you have agreed to advance expenses or not. To uncover potential problems, your office should find out from no-pays why they are not paying their bill. If the client is simply without the means to pay, then document this in writing with a suggested payment plan. The objective is to establish that your client's failure to pay is not a refusal based upon dissatisfaction, thus discouraging a client from making the pretextual argument, when a confrontation arises on fees, that the lawyering was bad. You should develop a policy which prevents clients from falling disastrously behind in payment of their billing, as one of the most common instances of malpractice suits comes as a counterclaim to a suit to collect fees and/or expenses. When contacted by non-clients regarding legal services, you should always follow up with a written "no-case" letter, or the "this is what you will need to do if you want us to work for you" letter (typically in cases involving pending offers made to prospective clients, or to "do-it-yourselfers" in the commercial, domestic, probate context.) Where appropriate, note that you are unfamiliar with the case or matter and thus cannot advise them on deadlines. Similarly, document disengagement or conclusion letters. You need to develop the habit of returning phone calls. If you have voice mail - listen to your messages, it may be someone other than that whining client who is trying to reach you. See, National American Insurance Co. et al. v. Thornton, et al., 225 Ga.App. 883, 485 S.E.2d 530 (1997) Court left message on answering machine for attorney giving required two-hour notice that trial would begin following business day, attorney failed to appear and entry of default judgment entered against client. Attorney subsequently was sued for malpractice. More and more, attorneys need to develop an understanding of the use of E-Mail. Print up your incoming and outgoing E-mail, or download it to a file, (such as in the client.dir) and file it with the client file. However, do not solicit potential clients through "spamming" - a Tennessee lawyer, attempting to attract clients seeking immigration green cards, transmitted unsolicited e-mail to over 10,000 Internet users and on-line discussion groups. He was subsequently suspended for one year. Particular fields of practice may have unique pitfalls. Trust and Estate lawyers, Real Estate lawyers, or others engaged in "nonadversarial" practices should document their initial client interview with a checklist, and conduct a plain spoken discussion about conflicts. Make it clear whom you represent, especially to individuals who stand to be heirs or beneficiaries under any plan you are drafting. You should document the intent of the plan, the identity of the client(s) and enumerate the documents you intend to draft. Remain cordial to non-clients involved in the process, but make it clear on whose behalf you are acting. You must also be aware of your liabilities to non-clients, as an example, in Colorado an opinion letter in a financial transaction was found to be the basis of liability to non-clients. See, Mehaffy, Rider, Windholz & Wilson v. Central Bank, 892 P.2d 230 (Colo. 1995). Communication skills are critical to personal injury attorneys. Listen to clients openly, the attorney whom the client feels is honest, available, and forthright, is less likely to be sued. You must document all important decisions in the case, and copy your clients in on every important document, especially: notices of trial, depositions, dispositive motions, and offers of settlement. Likewise, authority from your client should be obtained, preferably in writing, before making any settlement demand. You should never settle a claim without clear authority from your client - most jurisdictions, as a matter of law, find such conduct to constitute malpractice. See, Lewis v. Uselton et al., 224 Ga.App. 428, 480 S.E.2d 856. (Jan. 14, 1997, cert denied May 2, 1997.) Another hotbed of malpractice claims arising from miscommunication is domestic relations law. You should document any settlement offer, and your advice as to whether to accept or reject. When documenting the response to the offer, you should make it clear that the client has the authority to make the decision, and that the client recognizes that there is a risk that the trial might result in a judgment less favorable than the proposal. Ancillary issues to communicating include documenting your file. Establish a clear cut system for taking notes during phone calls, and preserving the notes to the file. Your office staff should use, on a routine basis, client contact sheets with date/time, phone, office visit, court or hearing, yellow pad or DAYTIMER sheets at hand for note taking which get copied to file. Your files should be maintained in such a manner as to always enable you to promptly ship a copy of your file with notes when a file is transferred, or subpoenaed. And, since, for many of us, our computers are the ultimate filing cabinet - Backup your computer system routinely! 3. Competency Check—yours and that of co-counsel If your firm has several lawyers, the firm should rigorously implement procedures for supervising and overseeing work performed by other than lead counsel. See, Bill Parker & Assoc. v. Rahr, 216 Ga.App. 838, 456 S.E.2d 221 (1995) A senior attorney may be personally negligent if firm fails to follow procedures and practices, and malpractice results from failure. The more covert intrusion of incompetency is that of your co-workers. Beware who you associate with - you may be held liable for co-counsel's negligence. See, Floro v. Lawton, 187 Cal.App. 2d 657, 10 Cal.Rptr. 98, (1960, 2nd Dist) attorney may be held vicariously liable for negligence of co-counsel; Cohen v. Lipsig, 92 App.Div. 2d 536, 459 NYS2d 98, (1983, 2d Dept) question of fact whether attorney had derivative liability for selection of trial counsel. Also, J.M. Cleminshaw Co. v. Norwich, 93 FRD 338, 33 FR Serv 2d 554, (1981, DC Conn.) Both attorneys personally liable for sanctions for failure on part of co-counsel to comply with discovery orders and discovery requests. And you should bear in mind that "co-workers" includes office help. See, Bullard v. Bailey, 959 P.2d 1122 (1998, Wash. Ct. App.). Attorney held liable to client for paralegal who fraudulently settled client's personal injury claim and then ran off with the settlement proceeds. A caveat for those representing out-of-state clients, generally you cannot collect fees for legal work performed in states where you are not licensed. See, Birbrower, Montalbano, Condon & Frank, P.C., et al. v. ESQ Business Services, Inc., 17 Cal.4th 119, 949 P.2d 1, 70 Cal.Rptr.2d 304. California client sued New York law firm for malpractice, firm counterclaimed for fees due under fee agreement - court held firm could not recover under fee agreement for services constituting practice of law in California. 4. Read Be certain that you read what crosses your desk. If you don't read a file, you won't know what your discovery should look like. Over 10% of malpractice claims arise from inadequate discovery or investigation. See, Partin v. Fischer, 1997 WL 124104 (1997, Mass.Super.) BACK TO TOP 5. Just say No Your personal life, and personal health, should not be overlooked. How's your cardio- vascular health? Have you seen the sun lately? If not, you're not alone, the graveyard is full of lawyers who die young. For the survivors, national surveys report rising rates of job dissatisfaction among lawyers. Most blame the mental and physical stress of their practice for their low level of job satisfaction, with over 70 percent reporting intolerable daily pressures. A number of lawyers are dropping out of the profession. A survey by the Maryland State Bar Association found that approximately 35 percent of that state's lawyers expected to be doing something other than practicing law within five years. According to the ABA Commission on Lawyer Assistance Programs (CoLAP), while about ten percent of the general population has problems with alcohol abuse, anywhere from fifteen to eighteen percent of the lawyer population battles the same problem. All fifty states now have developed lawyer assistance programs or committees focused on quality of life issues. If you want to smoke a cigar - do it alone. Everyone knows that sex with a client is prohibited - but so is sex with the client's spouse. See, Kahlig v. Boyd, 1998 WL 429638 (Tex.App. - San Antonio.) Attorney represented client in custody suit, during which time attorney initiated affair with client's current wife. The opinion opens with "The facts of this case sadly unfold like a classic a bad lawyer joke' and confirm what we as attorneys fear most: that perceived truths about our profession can find support in reality." 6. Do Not Steal 7. Beware of Conflicts Increased caution must be undertaken by those representing multiple claimants in an aggregate settlement. A conflict of interest is usually viewed as aggravating the underlying malpractice and making it more valuable. See, Crookham v. Riley (1998 Iowa) 1998 WL 650865, when a conflict of interest results in a loss of a settlement, it is the proximate cause of damages, and the loss of the settlement and what the client actually recovered is the measure. There is no blanket prohibition against getting into business with your client, but such a venture is fraught with pitfalls. In many jurisdictions, such transactions are voidable at the option of the client and all presumptions are against the lawyer. Before an attorney gets involved in a business transaction with a client, the attorney should make full disclosure concerning potential conflicts, as well as all information available to him or her bearing on the potential transaction. The attorney is to protect the interests of the client in the same manner the attorney would if the business transaction was between the client and a stranger, while communicating everything necessary for the client to form a correct judgment as to the value of the property or business transaction. The attorney may be required to provide the client with all material information associated with the transaction and assure that the bargain was as beneficial to the client as if dealing with any other purchaser or business venturer. The attorney must make full disclosure of all facts that might influence the client's decision concerning the business transaction, including determining the value of the property or transaction and so advising the client. And as previously noted, do not sleep with, make sexual advances upon, or make sexual suggestions to a client. If you do, you will find yourself on the cutting edge of the sexual harassment jurisprudence, and it will not be covered by your malpractice policy. 8. Understand the relationship between the Grievance and the Malpractice Claim As a general rule, a cause of action cannot be predicated solely on the violation of a rule of professional conduct or responsibility. Astarte, Inc. v. Pac. Indus. Sys., Inc., 865 F.Supp 693 (D.Colo. 1994) Colorado's ethical codes neither create private causes of action nor prescribe standards of civil liability; Coleman v. Hicks, 433 S.E.2d 621 (Ga. 1993) Claim for legal malpractice may not be based on claim of excessive legal fees violating rule of professional conduct; Nagy v. Beckley, 578 N.E.2d 1134 (Ill.App.Ct. 1991) No cause of action for "ethical malpractice" may be stated separate and apart from a claim for legal malpractice. A Michigan court has ruled that the violation of Code of Professional Responsibility gives rise to a rebuttable presumption of actionable negligence, Lipton v. Boesky, 313 N.W.2d 163 (Mich. App. 1981), see also, Battie v. Firnschild, 394 N.W.2d 107 (Mich. Ct. App. 1986). In California, the violation of an ethical rule may be negligence per se. The California Court of Appeals upheld a multimillion dollar judgment against an attorney for legal malpractice, observing that the standards of ethical conduct established by the Rules of Professional conduct could not be altered by expert testimony, and if the expert testified contrary to the rules, then the expert's testimony was to be disregarded. Day v. Rosenthal, 170 Cal.App.3d 1125, 217 Cal.Rptr. 89 (1985), cert. denied 106 S.Ct. 1267 (1986) . All attorneys should note that the filing of a grievance may trigger the notice provisions of a malpractice insurance policy. 9. Accept your fallibility And once covered, you must keep your insurance company informed. This includes filling out the application fully and disclosing, fully, all claims, grievances and potential claims. In the event of a dispute, the Court may apply a "reasonable person" standard to determine whether the attorney knew that client may sue for malpractice after neglecting matter for 12 years, see, Mt. Airy Insurance Co. v. Thomas, Nos. 97-3137 and 97-3138 (3rd Cir., 1998); Pelagatti v. Mt. Airy Insurance Co., 1996 W.L. 184474 (E.D. Pa., 1996), the same Mt. Airy provision was invoked to avoid professional-liability coverage for a lawyer who neglected a claim for six years. Likewise, notify your insurer if you receive either a grievance or a communication which suggests that a client is intending to make a claim. If you have an unhappy client, you may have a "basis to believe" that a claim will be filed against you, see, Selko v. Home Insurance Co., 1998 WL 106118 (internally 3d Cir. Pa., March 12, 1998.) If you are served, immediately hire competent counsel. "A fool for a client . . ." etc. When the action for legal malpractice is predicated upon an error in handling an underlying matter, the claim has been characterized as a case within a case. To prevail in some jurisdictions, the plaintiff is required prove not only that the lawyers failed to exercise reasonable care, but also that the plaintiff should have been successful in the underlying action. Miller v. Byrne, 966 P.2d 566 (Colo. App. 1995). However, in Ohio the court held that plaintiffs were not required to show that they would have prevailed in civil, criminal, and administrative proceedings in order to recover in malpractice action. Vahila v. Hall, 77 Ohio St.3d 421, 674 N.E.2d 1164 (1997). A client's cause of action can accrue before the attorney ceases representation. Bruce Miller, Cloud Base, Inc. v. Thomas Byrne, William White, et al., 916 P.2d 566 (Colo. App. 1995.) Colorado law permits a client to maintain a claim if the client has incurred expenses to attempt to remedy the attorney's negligence. Jacobson v. Shine, 859 P.2d 911 (Colo. App. 1993); Palisades National Bank v. Williams, 816 P.2d 961 (Colo.App. 1991). Thus, attorney malpractice statutes of limitations may begin to run prior to the conclusion of the underlying claim - but don't count on this as a defense. Insurers participating in the Legal Malpractice Claims in the 1990s ABA Report observed that statute of limitations defenses are less successful in legal malpractice cases than a decade ago, that courts appear to be increasingly willing to find a basis for extending the deadline. As with most human endeavors, know when to stop: This is an appeal by John L. McGann, appellant herein, a Virginia lawyer who claims he was not subject to a lawsuit in the Circuit Court for Prince George's County, Maryland, because the Maryland court lacked personal jurisdiction over him. Both appellant herein and his co-counsel, a Maryland lawyer, became impaled on their own petards as a result of requesting that the trial judge, at the conclusion of a civil jury trial in Fairfax County, Virginia, allow the jury to disclose what its verdict would have been had the case not been settled minutes before the jury returned its verdict. Counsel settled the case for $200,000; the jury verdict would have been $750,000. Once those disparate figures hit the proverbial fan, the battle began in earnest. We explain . . . And just because you die, don't think you're off the hook... T&R Foods, Inc. v. Sidney R. Rose, as personal representative, 47 Cal.App.4th Supp. 1, 56 Cal.Rptr.2d 41 (1996), Attorney Fadem posthumously found personally liable for professional negligence in failing to segregate out client's funds. Appendix of Pertinent Websites: 2001 Worldwide Copyright of Chalat & Koupal PC, Revised 8/1/01, LJC |
Providing Results with Compassion for Over 20 Years
Chalat Hatten & Koupal PC
1900 Grant Street
Suite 1050
Denver, Colorado 80203
Telephone: 303.502.5007 Fax: 303.861.0506
