Malpractice Seems to be the Hardest Word

With the recent environmental catastophies in Japan, and the resulting crises involving the Fukushima Dai-ichi nuclear plant, officials at the Tokyo Electric Power Company (TEPCO) who operate the nuclear facility have found themselves apologizing to the Japanese public quite a bit.  In Japanese culture, apologizing for one’s actions is a way to maintain harmony and knowing the right way to do it is a must. 

Ocassionally the question comes up, “What should a lawyer say to a client when they know they have made a mistake on a matter?”   There is much guidance for lawyers that can be found in Rule 1.4 Communications, in the ABA Model Rules of Professional Conduct, which states that lawyers must keep their clients reasonably informed about the status of their matter.  If you are aware that a statute deadline date for serving a pleading was missed and a claim that the client may have had is gone for good, then you owe it to your client to promptly inform them of the of the change in the status of their matter.

So what is the best way to give client’s some bad news?  Here are some tips we have for you:

• First, report the matter to your malpractice carrier.  Things may may not as bad as you think and sometimes a fresh set of eyes can see that there may be some steps available to getting the client’s matter back on track.
•  Accept the fact that you might have made a mistake.  Statistically, you are likely to have three malpractice claims in your career and going into denial or avoiding the client is often disasterous.    
• Be prompt when reporting bad news to the client.  Your malpractice carrier will help give you the right words to tell the client what has happened without making matters worse.
• Don’t fall on your sword.  You made and error, so the right thing to do is to tell them about it and what the options are for fixing it.  A little contrition is a good thing, but it is not necesarry to confess every error you may have made and how you will help them take on the insurance claim against you. 

If you have good relationships with your clients, they can be very understanding when you are trying to fix the problem that you may have created.  Part of that good relationship is keeping them fully informed about what is happening with the matter – even if that means informing them of your error.  Apologies can go a long way with preserving the goodwill you have created, and can help start the process of getting the matter back on the road to success.

Decline in Jury Cases Leaves More Lawyers Without Trial Experience

Add highly experienced trial lawyers to the U.S. Endangered Species List.  The Tennessean reports that the trend of settling disputes through alternative means rather than going through a jury trial is leaving more lawyers without essential trial experience and possibly opening those lawyers up to more mistakes in the litigation process.   The numbers of declining trial cases in Tennessee alone are surprising.   In 2010 there were only 384 jury trials in state civil courts — nearly 1,000 less than a decade ago. Forty-three were in Nashville, down from 138 in 2000.   Federal trial courts have experienced a similar trend.  There were 5,325 civil and criminal jury trials in U.S. district courts in 2008, down from 6,839 in 2000 and 9,844 in 1990.  The trend raises concerns among lawyers and judges that the rare case that does go to trial may be handled by an inexperienced lawyer prone to making mistakes.   The Wall Street Journal has cited numerous reasons for the decline in jury trials that go beyond alternative dispute resolution including rapidly increasing trial costs, backlogged court systems, and an increasing belief that jurors don’t readily grasp the complexities of legal matters.  Whatever the reason, lawyers are taking notice of trial skills limitations in some of their colleagues, which in some cases has led to disputes about the truthfulness of using the label ”trial lawyer” in legal advertising.   For attorneys looking for innovative ways to gain essential trial experience, Lawyer-Coach.com has a few suggestions including:

• Participate in pro-bono or volunteer lawyer groups that may offer training and mentoring from experienced trial lawyers.
• Offer to second-chair interesting trials for free to get valuable increased time in front of a jury.
• Offer reverse mentoring in exchange for time assisting in trial.  You may have more to offer an experienced litigator than you think. 

South Dakota Case Sends Warning to Lawyers Representing Child Pornography Defendants

Sioux Falls, South Dakota criminal defense attorney Leo Thomas Flynn was acquitted of two counts of possession and one count of distribution of  child pornography by a federal jury last month in a case that many legal observers say will have a chilling effect on lawyers who assist defendants facing child pornography charges.  Flynn, who was in the process of researching a matter involving his client facing child pornography charges, found himself being investigated and charged under federal anti-child pornography statute 18 U.S.C. sec. 2252.   Despite a South Dakota’s immunity statute that protects attorneys from prosecution for possession of child pornography if it’s possessed in the course of their official duties, federal prosecutor’s declined to honor the immunity statute and charged Flynn.  U.S. District Judge Lawrence L. Piersol agreed that the South Dakota statute could be a defense for the possession charge, but not the charge involving the distribution counts.  Flynn’s defense counsel needed to show that Flynn was acting in the course of his official duties  during the time period when the images were found to have been downloaded to Flynn’s work computer, and that Flynn did not knowingly distribute the illegal images.  Complicating the alleged distribution matter was attorney Flynn’s lack of understanding of how the peer-to-peer file sharing software Limewire works in its default mode – that is, any images Flynn downloaded in the course of his research was visible to other Limewire users.  The federal jury acquitted Flynn after a six-hour deliberation but legal observers believe that lawyers taking on child pornography cases acting in good faith under state statute will now fear prosecution by the federal government.   Experienced criminal defense attorneys recommend absolutely avoiding looking at the material the client is accused of possessing, or in the alternative, if you need to access images in an active federal child pornography case, request that the FBI assist you with obtaining the images in question.

Firm Lapse in Lacrosse Patent Case is Basis for Subject-Matter Jurisdiction in Federal Court

Reversing a U.S. District Court’s dismissal of a legal malpractice action for lack of subject-matter jurisdiction, a recent decision by U.S. Court of Appeals for the Federal Circuit remands the malpractice case to district court on the basis that at least one of the plaintiff’s claims requires the court to resolve a substantive issue of patent law.   The plaintiff, Warrior Sports, a manufacturer of lacrosse sticks, pursued a legal malpractice matter against their attorneys for mischaracterizing the structure of lacrosse stick to the Patent and Trademark office, and failing to pay a patent maintenance fee causing the patent to lapse.  Each of the parties in the matter agreed that the case, Warrior Sports v. Dickinson Wright and John Artz (Fed. Cir 2010-1091), required federal jurisdiction on the basis that U.S.C.  § 1338 grants U.S. District Court exclusive jurisdiction over cases arising under a statute relating to patents.  The U.S. District Court Eastern District of Michigan disagreed and dismissed Warrior’s lawsuit for lack of subject matter jurisdiction.   On appeal, the Federal Court reversed the dismissal in a January 11, 2011 decision and remands the matter back to the district court on the basis that a Michigan malpractice claim arising in patent law should be heard in Federal Court. 

In Michigan, legal malpractice has four elements: (1) the existence of an attorney-client relationship; (2) negligence by the attorney in the legal representation; (3) actual injury; and (4) that the negligence was the proximate cause of the injury.   To prove the proximate cause and injury elements of its tort claim, Michigan law requires the plaintiff Warrior to show that it would have prevailed on its infringement claim against a competitor stick manufacturer who attempted to take the patent after the lapse, and that the plaintiff would have been entitled to an award of damages as a result.  Since at least one of the plaintiff’s malpractice theories requires proof of patent infringement, patent infringement is a necessary element of the plaintiff’s malpractice claim and therefore presents a substantial question of patent law that requires federal jurisdiction.

Did Lawyers for Retired NFL Players Fumble Class Action Lawsuit?

With recent malpractice allegations involving NBA basketball, and MLB baseball, now comes a possible lawsuit by 2,062 retired NFL players against their lawyers who last November, secured a $28 million dollar class action verdict on their behalf from the NFL players union for cheating the retired players out of royalties from videos games and other products.  The attorney’s mistake?  To the retired players the award wasn’t enough money.   The retired professional footbal players,  a group that includes NFL legends as  Herb Adderley, Paul Hornung, Chuck Bednarik, and John Brodie first brought the underlying legal action against the NFL players union requesting that the retired players receive a 50-50 split of the royalties that were dedicated to the players still active in the league – a request that would have netted the players $29 million.  Instead, a San Francisco jury returned a verdict in favor of the retired players for only $7 million.   Despite the setback, the retired players were awarded another $21 million in punitive damages — all that the plaintiff’s asked for, equalling 10% of the net worth for the player’s union — after making the case that the players union engaged in “deliberate and malicious scheming” to deprive the retired players of their entitled royalties.  To the retired players, each of whom would receive about $13,000, the award is not enough.  Adding to their feelings that their attorneys dropped the ball in Adrian Peterson-like fashion is a 12-page opinion by U.S. District Judge William Alsup rebuking attorneys Ronald Katz and Peter Parcher of the law firm of Manatt, Phelps & Phillips for their initial request of a fee equaling 30% of the class-action recovery.  The Opinion that attacked the firm and its work has likely contributed to the retired player’s feeling that the legal work was somehow negligent.  The problem for the lawyers representing the retired players is now whether they can show that the Judge’s opinion may be a reflection on how certain aspects of the case was handled, but it shouldn’t overshadow an outcome that achieved over $28 million for their clients.

News to Some: Elements of Legal Malpractice Often Difficult to Prove

Stuart Watson, an  investigative journalist for WCNC NewsChannel 36 of Charlotte, North Carolina reports on a local resident’s frustrations with pursuing a legal malpractice action against an attorney she hired to pursue a medical negligence case involving the death of her grandmother.  The attorney, Karen Zamen, recently surrendered her license to practice law after the North Carolina State Bar had reprimanded Zaman for neglecting clients, missing a critical filing deadline that forfeited her client’s opportunity to make a claim, and for taking a dismissal on a case and not even informing her client until more than a year later.   The investigative news story entitled, “When Your Attorney Screws Up: Legal Malpractice in North Carolina,” reports that Zamen’s client had difficulty finding an attorney to pursue a legal malpractice action against Zamen because of the elements necessary to be successful in a North Carolina legal malpractice action.  That is, Zamen’s client would have to prove the “case within the case” and show that the underlying medical negligence matter would have been successful, but for the attorney’s conduct.  With costly medical experts and tough standards involving medical negligence matters, it can sometimes be difficult to show that the underlying matter would have been successful had it gone to trial.   We would like to point out two important lessens for attorneys looking at this matter:

• Medical negligence cases are among the most difficult cases for attorneys to handle.  Their enhanced deadlines and strict evidentiary standards often require you to have expert medical testimony supporting your client’s case at the start of the matter, and therefore, they are not for the faint of heart.  If you are new to the practice  area, work closely with experienced attorneys who can properly guide you through the pitfalls of handling a medical negligence case.
• Talk to your clients.  Attorney Zamen settled the case on behalf of her client and didn’t inform her client of the settlement for some time afterward.  By then the client, who saw very little of the settlement amount, is already set up for disappointment.  No case should be settled without the client’s consent, and it is always best for an attorney to get the client’s consent for settlement in writing.

RU@Risk? Named Top 25 Minnesota Blawg

We’re pleased at Minnesota Lawyer’s Mutual to find out that this blawg - RU@Risk - has been recognized as one of the Top 25 Minnesota Blawgs - 2010 by the editors of Minnesota State Bar Association’s Practice Blawg.  2010 is the first year for the creation of the Top 25, and the editors chose not to rank the list in order to, “promote legal blogging in Minnesota, not to figure out who should win second prize in a beauty contest.”  It was said of the blog, ”Of all the blogs listed, RU@Risk is potentially the most useful and important to all attorneys. Why? Because it discusses risk management for lawyers…  It is one of the few blogs in the nation devoted entirely to educating lawyers about malpractice.”  Thanks for the recognition and we will do our best to keep the legal public informed about the best ways to avoid a malpractice claim.

Lawsuits by Lawyers for Unpaid Fees Equals More Malpractice Claims

Insurance Journal, considered the most read national property and casualty publication for independent insurance agents and brokers, looks into the reasons why lawsuits against attorneys seem to be on the rise lately.  At the recent 2010 PLUS International Conference in San Antonio, Texas,  Michele Wade, executive vice president of Lockton Cos. and Kelley Martin, senior claims specialist in the technical resource center of Scottsdale Insurance Co. spoke to the insurance publication about their thoughts on why more lawyers are getting sued.  The economy seems to be playing a part, affecting firms that are more vulnerable with fewer lawyers and staff taking on more matters.  High on the list of reasons why more lawsuits seemed to be aimed at lawyers is that lawyers are taking on more collection activities, seeking payment for unpaid invoices.  If you are looking to get paid for past due invoices, please keep this advice in mind:

• Suing for fees is almost always like buying yourself a malpractice claim.  It is a very easy step for the subject of your lawsuit to file a counter-claim for legal malpractice, often alleging that the reason for non-payment was that your legal services were sub-standard.  Avoid suing your clients for unpaid fees if you can help it.
• Consider adding an arbitration clause in your retainer agreement requiring all parties to submit their concerns to arbitration if the client thinks the bill is too high.  It may not be exactly the kind of thing that you care to discuss with a new client signing your retainer agreement, but a clear policy that helps keep an unpaid bill out of court is fair and can keep the matter from getting worse. 
• Talk to the client and consider asking them why they haven’t paid the bill.  If you are willing to hear them out and let them negotiate a lesser payment, it may save you a lot of trouble sending multiple invoices and always wondering whether the client will finally pay what they owe.
• Don’t let the bill get too high.  Clients that learn right away that no legal services will be performed if payment is not made realize early on the importance of the services you are performing for them and how to properly budget for your fee.
• Foonberg’s Rule:  Get burned cheap.  If you are going to have to part ways with a client and write-off an unpaid bill, do it early in the matter when it won’t cost you so much.     

Bean Ball: One Wrong Word in Dodgers Ownership Document Means Likely Malpractice Suit

Every now and then a single word in a legal document can mean the difference between successful client service and a costly legal malpractice lawsuit.  In a case involving a divorcing couple, Frank and Jamie McCourt, who own the professional baseball club Los Angeles Dodgers, the lawyer for the couple prepared ownership documents with a discrepancy involving a single word.  Three of the six documents prepared for the couple during their marriage indicate that Dodger ownership, an asset that Frank McCourt purchased during their marriage, is “inclusive” to their joint marital property, whereas three nearly identical documents describe the ownership interest as “exclusive.”  Lawyers for Frank McCourt believe that Larry Silverstein, the lawyer who prepared the documents, added the word “exclusive” to correct the original documents that were drafted in error.  Jamie McCourt has already testified that the notion she would surrender her rights to the professional baseball team is “preposterous” and the document limiting ownership rights ought to be thrown out.  The divorce trial is ongoing in Los Angeles Superior Court.  Here are a few things that Silverstein could have done to avoid this problem:

• A matter involving identifying marital property probably requires that all parties involved be represented by separate legal counsel.  Silverstein’s action to “correct” the document, if done upon the request of Frank McCourt, has the appearance of protecting one party’s interests over that of the other.
• All changes to legal documents should be done with notice to all parties involved in the matter.  Silverstein may have taken instruction from Frank McCourt to correct the error but the change he made should have been accompanied by document notifying everyone involved in the matter that a change has been made.
• If extra copies of a document have been produced after a change has been made, the attorney should make efforts to collect and destroy prior copies of the document.  A note to the legal file indicating how many copies of the document were produced and who received them would help in recovering any of them at a later time. 
• During document production, always keep prior versions of the document in electronic or paper format.  By implementing version control policies within the firm, you may be able to identify which version of a document that the client has and identify quickly whether the client has the most current version of the document.
• Comparison software tools such as Diff Doc allows you to make quick and thorough comparisons of documents in many file formats including MS Word, Excel, PowerPoint, text and HTML.  Whenever an attorney finds themselves wondering if a change has been made after a document has been in someone else’s hands, software tools that can quickly find the slightest differences between two documents will give the attorney peace of mind that nothing was unnoticed. 

Television Tax Lawyer Sued for Fraud in Advertisement Misrepresentation Claim

America’s best-known tax attorney Roni Deutch, who has claimed in commercial advertisements and television interviews to have represented over 55,000 clients saving them over $150,000,000 in taxes, was sued this week by the California Attorney General for $34,000,000 for allegedly swindling thousands of client by using false claims in her advertising.  The allegations in the lawsuit, filed in Sacramento County Superior Court, claim that Deutch made misleading representations and engaged in unfair competition while victimizing thousands of people in California and elsewhere.  California Attorney General Jerry Brown has stated that, despite Deutch’s advertisements that promise to significantly reduce her client’s IRS tax debts, Deutch instead, ”Preys on their vulnerability, taking large up-front payments but providing little or no help in lowering their tax bills.”  Instead of reducing clients’ tax bills, Brown’s lawsuit claims Roni Deutch put people deeper in debt by placing them “in an endless loop of requests” for duplicate documents that resulted in higher fees and penalties from the Internal Revenue Service, and by falsely billing them for services she never rendered.  California’s Rules of Professional Conduct 1-400(D) Advertising and Solicitation prohibits any communication, ”Which is false, deceptive, or which tends to confuse, deceive, or mislead the public.” 

Fraud claims are among the most costly of all lawyer malfeasance claims because of enhanced penalties that state consumer protection laws often contain.  Public policy considerations and the insurance principle of moral hazard require that intentional acts of fraud are generally excluded from professional liability insurance coverage.  If the fraud claims against Deutch are proven true, California’s suit could result in the attorney not only having to return to her clients any amount deemed to be excessive, but also fees that were earned by the tax firm for which work was actually performed.  Although it is unclear from reports whether the suit alleges Deutch’s actions were intentional, California like many other states with consumer protection laws also allows additional penalties for intentional violations of the state’s Business and Professional Code Section 17500.3(c) of up to two times the amount of the sale price of the legal services.