According to a study by Ames & Gough, an insurance broker, the number of new legal malpractice claims have stabilized; however, it is still higher than before the recession from 2007 to 2009.
This is the seventh time the insurance broker has looked at the trend, gathering information from nine professional liability insurance carriers for lawyers. Those nine carriers provide legal malpractice insurance to about 80 of the top 100 law firms. Here are some of the findings in the study.
- The number of severe claims was high. This is something seen for the past few years. Six of the insurers report that they have had at least 21 claims. The same number of insurers paid a claim of $50 million or more in the past two years. One claim was over $100 million.
- The primary cause of claims remains conflict of interest, which is the same primary cause found each time the insurance broker has done the survey.
- The cost of defending such claims is getting more expensive. All nine of the insurers said that legal malpractice defense costs are rising. Eight said that it costs more than $50,000. Two insurers said that their average costs to defend a case is over $500,000. The reason for the rise in costs? The complexity of the claims and e-discovery.
The individual practice areas with the most legal claims is business transactions for the second year. These claims tend to be about the filing of documents, improper preparation and failure to provide appropriate legal advice.
If you believe that you are a victim of legal malpractice, you do have a course of action. An attorney experienced in these cases can help you understand your legal options.
Source: Insurance Journal, “Insurers Say Legal Malpractice Claims Hold Steady But Defense Costs Rise,” accessed Aug. 04, 2017