Tuesday, August 2, 2016

Conflicts: Malpractice Insurance Claims Trends

From Ames and Gough comes: "Uptick in Lawyers’ Liability Claims; Business Transactions Top Claim: Study"--
  • "Law firms have seen an increase in the frequency of malpractice claims, which are becoming more costly to defend and could cause lasting reputational damage, according to a new study by insurance broker Ames & Gough. The study found that most legal malpractice insurers saw an increase in the frequency of new claims in 2015, including larger claims with costs in excess of $50 million."
  • "In its sixth annual survey of lawyers’ professional liability claims, Ames & Gough examined the trend by polling nine lawyers’ professional liability insurance companies that on a combined basis provide insurance to more than 60 percent of the AM Law 100 firms."
  • "Conflicts remain top cause of claims, the survey revealed. In each of the six years the survey has been conducted, insurers cited conflict of interest as the most common alleged legal malpractice error. This year, five of the nine insurers surveyed ranked conflicts the single biggest leading cause of legal malpractice claims; one other insurer considered it the second leading cause. Further, among the nine insurers surveyed, five reported an increase in claims resulting from lateral hires or firm mergers."
  • "'Conflicts typically come into play as law firms seek to grow either through mergers or by bringing in lateral hires,' [partner and senior vice president Eileen] Garczynski noted. 'Besides having these hires provide a complete list of their current and past clients, firms should conduct comprehensive cross-checks and validation sessions to enhance their chances of catching conflicts before there’s a claim. Too often, law firms don’t act quickly enough to address potential conflicts.'"

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