BY JOEL BERG, a freelance journalist and college professor who resides in York, Pa.
The share of claims resulting in million-dollar payouts, while still small, has been growing, according to the American Bar Association's Profile of Legal Malpractice Claims, a report issued every four years.
Between 2004 and 2007, 44 claims resulted in indemnity payments of $2 million or more, up from 19 in the previous four years, according to the association's study. The number of claimants winning payments between $1 million and $2 million jumped to 80, up from 37.
The study's sample size also grew, from about 30,000 claims to more than 40,000, the bar association said. But the number of big-ticket claims grew at a faster pace than the overall sample.
The association collects data from a range of legal malpractice insurers in the United States and Canada. Large law firms tend to be underrepresented in the sample and so are firms that go without insurance, the association cautioned. But, it added, the data remains useful for developing claims-prevention programs and shedding light on recent trends.
While there are more big payouts, other aspects of the legal malpractice arena remain unchanged.
Personal injury/plaintiff law continues to be the leading source of claims, accounting for 21.56 percent of the total filed between 2004 and 2007.
The large volume of cases handled by personal-injury firms is one reason they generate claims, said Richard Middleton, an attorney in Savannah, Ga. He represents primarily plaintiffs in legal malpractice cases.
Personal-injury firms often miss causes of action or statutes of limitations because they are not well-versed in the areas of law in which they accept cases, Middleton said. And they sometimes fail to treat clients properly or communicate with them.
"We see just lots and lots of cases," said Middleton, who is on the board of governors for the American Board of Professional Liability Attorneys.
REAL ESTATE CATCHING UP
Real estate, however, has been catching up, according to both the ABA survey and attorneys who specialize in legal malpractice. Real estate attorneys faced 20.05 percent of claims filed between 2004 and 2007, up from 16.46 percent in the previous four-year period.
The recession, which started in real estate, is one reason for the spike, said attorney Lance Kassab, a sole practitioner in Houston specializing in legal malpractice.
Kassab typically handles one real estate malpractice case at a time. He now has two on his desk and recently turned down a third.
"I find that a lot of people don't want to sue their lawyers. A lot of them don't even know that they can," Kassab said. "But I think when it's a bad economy and ... there's no other avenue, they try to blame their lawyers."
Other areas to watch include criminal law, according to the ABA. In its 2007 report, the bar association pointed out a continuing increase in malpractice claims arising from criminal matters. The practice area represented 5.08 percent of claims surveyed in the latest study, up from 4.19 percent in the 2003 study and 4.15 percent in the 1999 study.
Plaintiffs traditionally have had to prove their actual innocence to prevail in a malpractice claim against a lawyer, the association said. But, it added, "The steady increase may reflect a growing unwillingness by courts to shield criminal attorneys from the consequences of their negligent conduct."
Other changes from earlier ABA surveys include:
-- A decrease in claims arising in the category of client relations, which covers issues such as failure to obtain client consent or properly inform clients. The category accounted for 11.22 percent of claims between 2004 and 2007, down from 14.57 percent in the previous four years.
-- An increase in claims associated with timely filing of claims or complaints. Claims in the category had been shrinking. But they rose between the 2003 and 2007 studies, up from 15.59 percent of the total to 17.32 percent.
-- Intentional wrongs, such as fraud, slander or malicious prosecution, make up an increasing share of claims, rising to 13.53 percent in the 2007 study, up from 9.79 percent in 2003.
-- A drop in claims arising in the field of personal injury-defense. The practice generated 1,186 claims from 2004 to 2007, down from 2,953 in the previous four years.
May 1, 2010
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