Proactive Steps to Take When a Malpractice or Bar Complaint Problem Arises
As lawyers, we try very hard to manage our firms, minimize risk, and avoid problems with our practice. In doing so, we go above and beyond to do the best job possible for our clients. We try to be careful to think about risk management issues and we hope that we never have a problem that we need to report to our malpractice insurance carrier. Whether it is a legal malpractice complaint or claims letter, or a State Bar disciplinary complaint, or you just discovered a mistake which may turn out to be case-killer problem, what a lawyer does to maintain ethical standards, maintain insurance coverage and protect his practice is critical. Do you know how to react and what to do when such a problem should arises?
Get independent eyes on your problem
The first thing you should do: don’t panic, and don’t get angry. Emotions are high when a claims letter or Bar complaint is first received. Emotions clearly cloud good judgment and action should not be taken while under the influence of emotional upset. That’s why it is imperative to talk to a trusted colleague or the risk management partner of your firm. See what they think of the facts. Many times, independent eyes will see an easy solution that your emotional eyes did not. It is important to keep from being so upset by being accused of malpractice or an ethical violation that you miss an opportunity to try to cure a problem!
Talk with your insurance carrier
The second thing you should do: talk with your insurance carrier. Some insurance carriers prefer to be proactive and assist with what is called “claim repair.” They may hire independent counsel for you to look at your facts and circumstances, and recommend a course of action. Independent counsel can also help you determine how to handle and what to say to your client. What to say to your client and how you say it are extremely important in maintaining insurance coverage and in the future defense of a claim by the client.
Make appropriate disclosures to your client
The third think you should do: inform or respond to your client. If you discovered the problem before your client discovered it, and it cannot be fixed, it must be disclosed to the client. Timing of the notice is critical and implicates other ethical rules regarding holding the client’s interests paramount to all others. We have seen at least one decision by a court which held that the lawyer’s ethical duties to his client to notify the client of an error trump the lawyer’s contractual requirements of his insurance policy to notify the insurance carrier immediately. Generally speaking, if you discover that you made a mistake and your client is not yet aware, you only have an ethical duty to notify your client that a mistake was made and that the client should retain independent counsel.
Whether you discover a mistake on your own, or whether the client has knowledge of a mistake and complains about it, how and what you say to your client is critically important for several reasons. First, if you admit fault, you may void your insurance coverage! Second, if you deny liability or blame someone else, you may set yourself up for other claims such as a breach of fiduciary duty claim, and you could later lose critical credibility with the court or jury at trial. Third, an outright denial or blaming someone else (or your client) is a a sure-fire way to make your client angry enough to file a lawsuit or a Bar complaint. Fourth, the client’s legal malpractice lawyer will be more than happy to use your admission or blame shifting denial against you to establish liability. So tread lightly, stick to the facts and pick a narrow pathway between meeting your ethical obligations and admitting or denying liability. If your carrier has hired counsel for you, your counsel will be able to help you navigate this area.
Chandler & Moore Law has assisted and advised many clients dealing with these very sensitive issues for over 17 years. If you or your firm has received a claims letter or Bar complaint, you need objective counsel. Do not hesitate to contact a Chandler & Moore Law attorney for assistance.