Avoiding Communications Claims: Litigation
No matter what the area of practice, the number one source of claims at LAWPRO is a breakdown in communication between the lawyer and client.
Between 2008 and 2013, nearly 4,600 communications claims – an average of 762 a year – have been reported to LAWPRO. The total cost of these claims to date is about $158 million – and likely to rise as more recent years’ claims are resolved.
In the Fall 2011 issue of LAWPRO Magazine we asked LAWPRO claims counsel with expertise in the various areas of law to provide insights into the communications mistakes they see in their daily handling of claims files. We hope this approach makes it easier for you to implement risk management steps in your own practice.
Jennifer Ip, unit director and counsel (Primary Professional Liability Claims Department) and Yvonne Diedrick, claims counsel (PPL) provide some insights into how breakdowns in communication with the client can derail litigation or leave the client dissatisfied with the outcome.
Put it in writing
One of the biggest issues in the litigation claims LAWPRO sees is a failure on the part of the lawyer to properly document instructions. Clients may later say they asked the lawyer to do X and it wasn’t done; or the lawyer may have done Y and the client claims he didn’t authorize this course of action. If there is no documentation of the lawyer client/conversations, the claim then turns on credibility, and the experience has been that courts are more likely to believe the client’s recollections (the case is top of mind for the client, but only one of several for the lawyer).
The same failure to document discussions can be seen when advising clients on the terms of settlements and what the client can expect. Clients can be left thinking they will receive more money out of the settlement than they in fact get. “They may try to claim they were not aware that a portion of the award would flow back to the lawyer in fees,” says Ip.
When it comes to motor vehicle cases, some lawyers will handle only the tort action or only the accident benefits claim, not both, but they fail to put this limited retainer into writing. The client then comes back and says the lawyer failed to follow instructions – but by then the limitation period has expired – and now the lawyer faces the prospect of a claim. Even if you have put the limited retainer into writing, make sure the client understands what this means.
Many communication errors result in accusations of an improvident settlement. For instance, the defendant in an action may offer to settle for a lower amount than is really justified by the facts of the case and the lawyer is obliged to present this offer to the client. The client may want to settle, but if the lawyer doesn’t recommend the settlement, this advice should be clearly documented and communicated. Otherwise the client may come back later, perhaps when the money runs out, and accuse the lawyer of not properly explaining the situation or not making clear that the settlement might have been greater had the matter been pursued further.
Take the time to explain – and document
During a trial, things can happen quickly. LAWPRO has seen claims in which an offer was communicated verbally mid-trial. The lawyer then quickly explains (or says she explained) the offer to the client. The client rejects the offer and the lawyer’s recommendation to accept it, and goes on to lose the case. The client then sues the lawyer saying, “had I properly understood the offer, I would have accepted it.”
On the flip side, it may be the client who chooses to accept an offer to settle for a lower amount – despite the lawyer’s advice to the contrary. No matter how rushed you are or how convincing (and happy) your client appears, take the time to make notes of your conversations with the client and make sure your client fully understands the implications of the decision he or she is making.
Similarly, lawyers should communicate (and document that they have done so) the prospects of winning or losing a case. This is especially so in cases where the client insists on pursuing the case “on principle.” When the client loses, it’s suddenly no longer about the principle. “If the lawyer is of the opinion that the client has a weak case, the client needs to be told so and instructions to proceed to trial, despite the lawyer’s recommendation not to proceed, should be written down,” says Ip.
Communicate clearly – face-to-face if possible
As in all areas of law, lawyers are using email to communicate – resulting in increased misunderstandings. Clients or lawyers read things into emails that aren’t there, miss the meaning of what was said, or read between the lines and make assumptions, says Diedrick. “You can’t replace face-to-face communication. If geographic distance makes that difficult, pick up the telephone and later document the call in a follow-up letter or email.”
This is particularly important in litigation matters, which can go on for long periods of time and involve strong emotions. There isn’t necessarily the same tradition of a pivotal lawyer-client meeting as often occurs before the closing of a transaction in other areas of the law. Consider at what point in a long piece of litigation you should meet with the client, and be sure to document your discussions.
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