Archive for the ‘Biggest claims risks’
Civil litigation accounts for more legal malpractice claims in Ontario than any other area of law. It is also responsible for the second highest percentage of claims costs, after real estate.
From 2000 to 2010, litigation-related claims accounted, on average, for 34 per cent of LAWPRO’s claims count (650 claims per year), and 28 per cent of our claims costs ($17.4 million per year). On average, resolving a litigation claim cost LAWPRO $38,000 over that period.
While the annual number of civil litigation claims has remained relatively consistantly in the 600-700 range over the last 10 years, the cost of litigation claims is on the upswing, with costs in 2005-2008 being much higher than earlier in the decade. We are still assessing costs for 2009 and 2010.
The Law Society of Upper Canada is currently reviewing the ethical and procedural issues relating to the “unbundling” of legal services, otherwise known as “limited scope representations” or “limited scope retainers.”
Unbundling is the concept of taking a legal matter apart into discrete tasks and having a lawyer or paralegal provide limited legal services or limited legal representation, that is, legal services for part, but not all, of a client’s legal matter by agreement with the client. Otherwise, the client is self-represented. While the Law Society’s Rules of Professional Conduct and the Paralegal Rules of Conduct do not prohibit such retainers, there is nothing that expressly addresses limited retainers or unbundling of services.
For more information, see the Law Society’s background report which includes the proposed amendments to the rules.
The Law Society’s unbundling working group has recently concluded a consultation with the profession on proposed rule amendments and is reviewing the submissions it received.
LAWPRO made a submission as it is concerned that the more widespread provision of “unbundled” legal services in Ontario will increase malpractice claims. The source of this concern is that the root causes of the most common malpractice errors that LAWPRO sees are at least equally, if not more likely, to occur during the provision of unbundled legal services.
Unbundled legal services are one of the solutions to the complex issue of access to justice, and LAWPRO recognizes that the provision of unbundled legal services is occurring in Ontario at the present time and that they are likely to become more common.
However, LAWPRO feels it should be recognized that unbundled legal services are not appropriate for all lawyers, all clients, or all legal problems. LAWPRO feels that any effort to encourage or facilitate the broader use of unbundled legal services should include the consideration of all relevant issues with the goal of ensuring that clients get competent representation on all matters, including those provided on a limited scope basis.
In a nutshell, LAWPRO’s position is that all the rules that apply to full representation should also apply to unbundling or limited scope representation. Limited scope representation should not mean less competent or lower quality legal services. Lawyers providing unbundled legal services owe the same duties of competence, diligence, loyalty and confidentiality to limited-scope clients that they owe to full-service clients. As compared to a full scope representation, there may be fewer tasks performed by the lawyer on a limited scope matter, but the competency and quality of the work done on those tasks must not be less than it would be on a full service matter. It is critical that lawyers identify the discrete collection of tasks they can undertake on a competent basis when handling an unbundled matter, and it is clear to the lawyer and the client what tasks the lawyer is responsible for, and those for which the lawyer is not responsible. Ideally this should be done in a written retainer as post-matter disputes over the scope of work to be done are far more likely if the retainer is ambiguous and/or not in writing.
LAWPRO believes three fundamental requirements must be met before a lawyer may properly limit the scope of services to be provided to a client. First, the lawyer must consult with the client about the limited representation that will be provided. Second, the client must provide informed consent, and ideally, this consent should be evidenced by something in writing (to prevent post-matter disputes as to the scope of the retainer). Most importantly, the limitation must be reasonable in the circumstances and the engagement must not be so limited as to prevent competent representation.
If the greater provision of unbundled legal services is to be encouraged and facilitated through changes to the Rules of Professional Conduct and the Rules of Civil Procedure,
LAWPRO suggests that the goal of ensuring more satisfied clients and reduced malpractice claims can be attained by highlighting how the basic principles behind the ethics and court rules apply equally in the context of unbundled services. Some issues, such as the ghostwriting of pleadings, limited court appearances and the termination of an unbundled retainer will likely require Rules changes.
See LAWPRO’s Submission on Unbundling for more information on LAWPRO’s concerns.
In most areas of law practice, lawyer/client communication problems are the number one cause of claims, followed closely by deadline and time management issues. Together they typically account for more than half the malpractice claims LAWPRO sees. Failures to know or apply substantive law typically account for about 10% of claims. See The Biggest Claims Risks article for more detail about the most common malpractice errors.
So, while knowing substantive law is important, from a claims prevention point of view you get more for your risk management efforts by focusing on improving client communications and focusing on getting things done on time. With this in mind, here are my top tips for avoiding a malpractice claim:
- Start out on the right foot with a written retainer: The retainer letter or agreement is your terms of engagement. It should clearly identify who the client is and what you are retained to do.
- Get the money up front: At the time you are retained, get a retainer that is sufficient to cover all initial work that needs to be done on the matter. Replenish retainer funds before they are exhausted (set up your accounting system to monitor and remind you when the amount in trust is getting low). Stop working on the file if the retainer is not replenished – working on credit greatly increases the likelihood you will not get paid for your work. Of course, you can and should do pro bono work, but only when you choose to do it.
- Control client expectations at all times: Clearly and accurately communicate to your clients the available courses of action and possible outcomes; all the implications of any decisions; how long thingswill take; and the expected fees and disbursements.
- Document everything (almost): It is just not practical to document everything on everymatter, but you should document asmuch as you can in some contemporaneousmanner. Letters are fine, but e-mails, detailed time entries, andmarginal notes on documents can be equally effective. In particular, you want to record advice or instructions that involve significant issues or outcomes, and major client instructions or decisions. Documenting things is especially important when you are dealing with difficult or emotional clients.Memorialized communications help confirm what was said or done for the client in the event you ever need or want to look back to explain why or what work was done, to justify an account, or to defend yourself on a malpractice claim.
- Meet or beat deadlines: Set realistic deadlines when it comes to completing tasks and/or delivering things to clients. Underpromising and over-delivering (i.e. earlier than promised) on work for clients will make them very happy. Don’t leave things to the very last minute as unexpected events beyond your control (blackouts, snowstorms, taxi got lost on way to file documents) will prevent things from happening as required. Giving yourself an extra day or two by setting your deadline before the real deadline can be a lifesaver.
- Don’t do any of the things that most annoy clients: These are all the things that would equally annoy you. They include not returning calls or e-mails, long periods of inactivity, surprising a client with bad news or a large account.
- Don’t handle a matter with which you are uncomfortable: If you are unsure or hesitant about handling thematter for any reason (e.g. unfamiliar with the area of law, a potential conflict exists, matter for a relative or friend, demanding or difficult client), get appropriate help or refer it to another lawyer.
- Don’t wait until after the file is closed to ask how you did: Ask clients for feedback as thematter progresses, atmilestones or when interim accounts are rendered. Talk to major clients at least once a year, and do this off the clock!
- What goes around comes around: Your reputationwill precede you. Be civil all of the time, to your client, the counsel and client on the other side, judges and court staff.
- Send interim and final reporting letters: They should confirm what work was done, and the successes obtained for the client. For example: For example: Retainer terminated, futures steps, and so on.
- Don’t sue for fees: This almost guarantees a counter-claim alleging negligence.
- Document everything (almost): Read #4 again – it is the best way to avoid a claim.
Doing all these things will help you avoid the most common malpractice errors and ensure you have happy clients. And remember, happy clients don’t tend to sue their lawyers.
My good friend Jim Calloway, practice management advisor for the Oklahoma State Bar Association, just added a fantastic post on his Law Practice Tips Blog.
Jim’s post, One Firm’s View of Client Expectations is about a South Carolina law firm that has decided to use its web site to make certain their potential clients have clear and realistic expectations about the firm before they even schedule an appointment. Check out the Client Expectations (Realistic or Unrealistic) section of their web page.
This page has statements I have never seen on a law firm’s website before: “We do not work on the weekends and do not provide emergency numbers for the weekends” and “Do not think we are perfect. We make mistakes.” Wow! Have you ever seen anything like this on a law firm website before? You should read the entire expectations page. There is a fair bit of general advice about family law and litigating domestic disputes. This page clearly sets out the rules of engagement for the client if they are to retain the firm to act for them.
In his post Jim says, and I wholeheartedly agree with him, that one of the most critical things lawyers need to do at the start of a matter is discussing client expectations and making sure that new clients have reasonable expectations. This is one of the best things you can do to lessen your exposure to a malpractice claim (there is probably nothing better for lessening your risk of a claim). A client with unrealistic expectations is probably not going to end up as a happy client, no matter how good the results. Lawyers want to achieve good results and also produce satisfied clients who will return for more legal work in the future and perhaps refer other potential clients to the lawyer.
It seems like this firm has made a strategic decision to say “If you are going to a high maintenance client, you’re probably not going to be happy with us and we’re probably not going to be happy with you.” Good on them. They will have happier clients, and they will be happier and less stressed lawyers.
Now, if you aren’t quite ready to put this kind of language on your website, at least put similar statements in your retainer or the initial letter to your client. For a precedent consider using some of the comments from these two documents, a retainer and billing information letter and a matter process and administrative information letter.
Thanks to Jim for bringing this firm’s client expectations page to our attention.
If you are not careful, the Internet can be a dangerous place that can expose you to malpractice claims. LAWPRO Magazine has featured articles on Social media pitfalls to avoid and how there may be no coverage for some online activities: Danger Signs: Five activities generally not covered by your LAWPRO policy.
Another recent LAWPRO Magazine article on Practice pitfalls contains a section on Internet liability, which points out that “statements that lawyers make on the Internet, whether on law firm or other websites, or on social media sites such as Facebook, are a significant potential growth area for claims.”
On his The Trial Warrior blog, Toronto lawyer Antonin Pribetic has a great post that contains sage advice on the dangers of breaching client confidentiality with a blog post — Too Much Information: Blogging about your client.
Not only does the post contain great practical advice; it backs it up by citing relevant rules and commentary from the Law Society of Upper Canada’s Rules of Professional Conduct.
“In the end,” Pribetic concludes, “ask yourself this question: why am I writing this blawg post about my client’s case? If the answer is ego-fulfillment, self-promotion or catharsis, stop typing and delete the post. Even if your reasons are altruistic, get your client’s express consent first, and then save your draft and post after the final judgment is rendered and all appeals are exhausted.”
If you have a blog you should read Pribetic’s Too much information: The dangers of blogging about your client post.
Cross posted on Slaw.ca
The July/August issue of Law Practice Magazine is devoted to helping you avoid the dreaded allegation of legal malpractice, as well as other dangers to your law practice.
LAWPRO’s claims statistics indicate that four out of five lawyers will face at least one claim during the course of their careers. So the odds are you have already experienced a claim or two—and if not, you likely will. Let’s call this the bad news. What’s the good news? Many claims are preventable. The surprise for most lawyers—and the key take-away—is that failures to know or apply substantive law do not cause the majority of malpractice claims. The other significant causes of claims are task and deadline management errors, lawyer-client communications issues and conflicts of interest. I review the common errors in our cover story, and explain how improving basic law practice management skills can reduce your risk of a claim. The Web Extra has details of The Most Common Legal Malpractice Claims by Type of Alleged Error for US and Canadian claims.
Conflicts expert William Freivogel brings us up to date on conflicts risks, and Malcolm Mercer walks through the steps law firms can take to implement risk management strategies. Chris Stiegemeyer explains what underwriters look for (and don’t want to see) when reviewing malpractice insurance applications—and he has tips to help lower your premium.
In terms of unpleasant things, difficult clients probably rank slightly behind a malpractice claim for most lawyers. Justice Carole Curtis, who practiced family law for 30 years, discusses how to protect your practice and sanity when dealing with different types of difficult clients, while Sheila Blackford describes how to recognize them. A note of thanks to Sheila for her assistance in putting this issue together as well.
To reduce exposure to other risks, be sure to read Jim Calloway’s tips for recognizing bad cheque scams, along with David Ries’s explanation of new and expanding obligations to protect confidential client data. With all the foolishness happening on the Web, the issue would be incomplete without a discussion of online dangers. Michael Downey guides us through the online trouble spots, with invaluable advice on avoiding liability. It can be a dangerous world out there.
It was great to have the opportunity to spread the claims prevention gospel to Law Practice readers – and to share it further with Avoid A Claim readers – and I hope this issue of Law Practice helps you stay out of trouble.
Cross posted on Slaw.ca
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.
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.