"Avoid A Claim" Blog

The tough economic times have made it more likely that lawyers will be faced with the challenge of trying to collect on accounts or defend them. From LAWPRO’s experience, a malpractice claim is a very frequent response to a suit for fees. For this reason, lawyers should tread very carefully when trying to collect fees.

The Ontario Bar Association Solo and Small Firm Section has put together a CLE/webinar to help lawyers better understand how to use assessments as a tool, and to ensure they are fairly compensated for the efforts expended on behalf of their clients.

I like the pro-active nature of this program as it will help lawyers gain insights into how to conduct their practices in order to avoid the need for assessments; and how to best prepare for and conduct assessments to maximize the collection of their fees. Ed Upenieks, from Lawrence, Lawrence, Stevenson LLP is the program speaker.

The program runs Thursday, December 3, 2009 at the OBA Conference Centre (200 – 20 Toronto St., Toronto, Ontario), and is available via webinar as well.

The program agenda is as follows:

• 5:30 pm – Registration and Reception (Cash Bar)
• 6:00 pm Buffet Dinner
• 6:40 pm Program

CBA members and non-members may attend the program.

Go here for more details and to register.

The issues that arise when dealing with clients in hard times have come up in a few of my recent discussions with lawyers and in some of the claims LAWPRO is now seeing. This prompted me to think about an article that recently appeared in LAWPRO’s new Webzine.)

I posted a link to the article on SLAW two months ago, but thought the points in it are worth repeating for readers of AvoidAClaim. Not just to highlight the risks, but also to remind lawyers of the steps they can take to reduce their exposure to a malpractice claim and to encourage them to use the resources on the practicePRO.ca website to accomplish this – see a list of these resources at the end of this article.

When times are good, bumps in the road won’t always cause problems. Clients are upbeat and they want the deal to close, their problem resolved or the litigation matter to proceed. Happy clients are far less likely to sue their lawyers for malpractice.

However, in tough times, clients squeezed by money problem scan become unhappy and they will be more likely to look for ways to allege that their lawyers made a mistake. In a similar fashion, lawyers squeezed by financial problems can also find themselves more likely to engage in risky behaviour. Unhappy clients and risky lawyer behaviour translate into more LAWPRO claims.

In good times and bad, avoiding a legal malpractice claim requires that you understand where the risks are so that you can respond to them by proactively taking steps to reduce your exposure to a claim. As you will see, the risk management strategies you should employ in good times and bad are essentially the same. And, as clients are likely to hold you to a higher standard when money is tight, being proactive with risk management becomes even more important in tough times.
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Cross posted at Slaw.ca

There is a fantastic article by John Harvey at page 12 in the October 26 issue of Law Times. (Sorry I can’t give you a public link – unfortunately it is locked up for Law Times subscribers – They can access it in the Law Times Digital Edition here.

While written for Ontario lawyers as it references the Ontario Family Law Act (FLA), the risk issues the article highlights are very relevant for lawyers in other provinces and territories.

The article has some great comments and quotes from Lorne Wolfson of Torkin Manes LLP. The closing quote of the article says it all: “Estates practitioners must be extremely cautious when advising clients with respect to the potential consequences of estate planning techniques in the event of a separation of their clients and/or their client’s children”.

The article advises trusts and estates practitioners to think about the impact of the FLA when creating trusts. Trusts can certainly help with the deferral of taxes, but the FLA can throw some curves into the mix if the marriages of the clients or their beneficiaries end. In the event of a marriage breakdown the FLA dictates what counts as matrimonial property, and by extension, income if the issue of support in on the table.

The article has a good discussion of some of the issues and law in this area. It also makes another key point – estates practitioners shouldn’t dabble in family law – they should get some help from a lawyer that understands and can advise them on the potential FLA issues.

If you are a Law Times subscriber, pull the Oct 26 issue out of your inbox and read this article – it could help you AvoidAClaim.

The Residential Real Estate Transactions Practice Guidelines, adopted by the Law Society of Upper Canada in January, 2007 (the “Practice Guidelines”), provide guidance to lawyers in residential practice in a world where title insurance has become the norm. The Law Society of Upper Canada Real Estate Checklist (first adopted in the 1980s and revised in the mid-1990s) has never been updated to take title insurance into account. The Law Society’s Rules of Professional Conduct contain some mandatory requirements relating to lawyers’ use of title insurance, but these regulatory amendments made in 1997 do not really guide the lawyer aspiring to use title insurance in his/her practice in a positive, client-centred way. The Practice Guidelines thus provide useful insights and recommendations for the practising real estate Bar, given the reality of real estate conveyancing in the new millennium.
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Cross-posted on the SLAW blog (www.slaw.ca)

As part of a brief endorsement dated November 3, 2009 in RE: IN THE ESTATE OF Evelyn O’Reilly, et. al., Justice D. M. Brown of the Superior Court Of Justice–Ontario provided some useful direction on the form and content of an order in applications to prove a lost will under Ontario Rule 75.02. Ontario lawyers handling this issue on estate matters will find Brown J.’s comments helpful.

The relevant part of that endorsement is as follows:

[2] My only purpose in writing this brief endorsement is to deal with the form of the order.  Since the Rules of Civil Procedure do not prescribe the form for an order made under Rule 75.02, judges see a wide range of language submitted for proposed orders proving lost wills.  In order to bring some uniformity to this type of application, I would ask applicants to submit draft orders using the language recommended several years ago by (now retired) Justice Haley.  The draft order should read:

I declare that the Will of [insert name of deceased] dated [insert date of will] has been proved and that the copy of the Will adduced in evidence shall be admitted to probate as the last Will of  [insert name of deceased] deceased, until such time as the original may be found.

I direct that, subject to the filing of the appropriate documents with the Court, a Certificate of Appointment of Estate Trustee with a Will for the Will of [insert name of deceased] dated  [insert date of will] be issued to the applicant(s).

To this language should be added any other orders sought by the applicant, such as dispensing with service of the application, etc.

[3] Judges considering these applications are provided with a template endorsement using this language.  Therefore, in order for an applicant to avoid the delays associated with submitting a draft with different language and then having to submit a revised order that tracks the language of the endorsement signed by the judge, the language I have set out above should be used in the draft order submitted with the application record.

The decision is unreported as of today’s date, but I understand will be posted on CanLII next week. In the interim a copy of it is available here.

This came to my attention via the Ontario Bar Association Trusts and Estates Section’s list serve.

For my first real post to AvoidAClaim, I want to focus on the biggest cause of malpractice claims: lawyer/client communication-related errors. Over the last eleven years, by cost and count, more than one-third of LAWPRO claims involved this type of error – almost $25 million or close to 8,200 claims.

The adjacent pie chart shows the amount and proportion of communications related errors relative to the other most common errors we see.

More detail on the different types of errors appears in this article The Biggest Malpractice Claims Risks from the Summer 2008 (Vol. 7 no. 2) issue of LAWPRO Magazine, “practicePRO: Helping Lawyers for 10 Years.”

It is interesting to note that for sole, small, medium and large firms alike, roughly one-third of claims are communications-related. This is a profession-wide issue. More on this in a future post.

There are three types of communication-related errors. The most common is a failure to follow the client’s instructions. Often these claims arise because the lawyer and client disagree on what was said or done –or not said or done. These claims tend to come down to credibility, and in handling claims LAWPRO finds these matters are difficult to successfully defend if the lawyer has not documented the instructions with sufficient notes or other documentation in the file.

The second most common communications error is a failure to obtain the client’s consent or to inform the client. These claims involve the lawyer doing work or taking steps on a matter without client consent (e.g. seeking or agreeing to adjournment; making or accepting a settlement offer); or failing to advise the client of all implications or possible outcomes when decisions are made to follow a certain course of action (e.g. pleading guilty on DWI; exercising a shotgun clause).

Poor communications with a client is the third most common communications error. These claims often involve a failure to explain to the client information about administrative things such as the timing of steps on the matter, or fees and disbursements. This type of error also arises when there is confusion over whether the lawyer or client is responsible for do something during or after the matter (e.g. sending lease renewal notice to landlord, renewal of a registration or filing).

On top of being the most common malpractice errors, communications-related claims are also among the easiest to prevent. You can significantly reduce your exposure to this type of claim by doing the following things:

• Controlling client expectations from the very start of the matter: make sure your clients have realistic expectations about the timing, process, outcome and costs.
• Actively communicating with the client at all stages of the matter: make sure your client understands how the matter is moving along and that any delays that occur are explained.
• Creating a paper trail: In time entries, memos to file, and/or emails or reporting letters to your clients carefully document information provided by the client, instructions and advice, and confirm what work was done on a matter at each step along the way.

I will post more information on lawyer/client communication-related errors in future posts, including information on the specific types of communications errors LAWPRO sees in different areas of the law.

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