What To Do If You Have A Situation That Might Result In A Malpractice Claim
If you encounter a situation that you believe might result in a malpractice claim
(e.g., you become aware of an error you have made or important client documents are lost),
you first need to assess the probable damage done. Begin by asking yourself these
Could this incident cause my client harm?
If it were not for this incident, would my client's case be successful?
Can the situation by fixed (e.g., can lost documents be replaced, can a deadline be
extended)? Answer this question carefully. Often, insurance companies are experts in
"righting malpractice wrongs" and can repair a seemingly impossible situation.
Based on your answers to these questions, you'll have to decide whether to report the
incident to your client and to your insurance company. Keep in mind the following
Under the Model Rules of Professional Conduct (Rule 1.4, Communication), a lawyer has
an ethical obligation to keep a client informed about the status of a matter to the extent
necessary to permit the client to make informed decisions. A lawyer may not withhold
information to serve the lawyer's own interest or convenience. This duty extends to
informing the client of any errors committed by the attorney that may result in harm to
the client's interest. Failure to disclose errors may result in disciplinary proceedings
and a possible loss of the attorney's license.
Failure to inform a client about an error may not in itself exacerbate a malpractice
situation. The omission and, by extension, the basis for malpractice exist whether or not
the attorney report the omission to the client. Failure to inform the client of an error
may not, therefore, cause a new malpractice situation to exist.
In most cases, however, attempts by an attorney to "fix" an error are not
successful, and the client ultimately finds out about the attorney's error anyway, setting
the stage for a malpractice claim. If the attorney is found liable for malpractice, the
ultimate monetary judgement awarded may be influenced indirectly by the attorney's failure
to disclose information to the client.
In addition, the statute of limitations for the malpractice claim may be
"tolled" (suspended or stopped temporarily from running) if the client is not
notified of a mistake or error discovered by the attorney.
The bottom line is that it is in the attorney's and the client's best interest to
disclose any errors to the client as soon as possible.
All insurance policies include language requiring the insured to give prompt notice to
the insurance company of a malpractice claim or suit. This requirement enables the insurer
to defend the claim or, when possible, to mitigate or avoid a loss.
In addition, some policies also require the insured to report potential claim
situations to the insurer as soon as the attorney becomes aware of such situations. Such
language usually requires the insured to notify the insurer when he or she "becomes
aware of any act, error or omission which could reasonably be expected to be the basis of
a claim or suite covered by this policy..." Read your insurance policy closely. (The
language will usually be contained in a section called "Claims" or "Notice
of Claim or Suit.") Failure to report promptly incidents or claims to your insurer
could jeopardize your coverage.
Once a problem has been reported to the insurer, the insured may have an obligation to
keep the insurer up-to-date on any progress made to solve the problem. The insured may
thus find himself or herself in a "Catch-22" situation. If the attorney does not
report the problem, he or she may not have coverage; if the attorney reports the problem,
he or she may have an ongoing responsibility to keep the insurer informed about the
Some state bars sponsor confidential, toll-free WATS lines for attorneys to call with
questions concerning ethics and malpractice issues. These WATS lines offer the opportunity
to discuss with an expert your duty in the situations described above. Find out if your
bar sponsors such a program, and don't hesitate to take advantage of this service.
In addition to situations where the attorney discovers a mistake, there may be
situations where a client expresses serious complaints about the attorney's services. When
should you report these to your insurer? Whether or not you believe the complaint to be
justified, you should probably report such complaints to your insurer if you think there
is even the slightest chance that the complaint might turn into a malpractice claim. The
insurer may be able to offer you advice on remedying the situation, enabling you to avoid
the prospect of having a claim filed against you. This is especially critical when
switching insurers. Your former insurer will require that all claims and any circumstances
be reported before coverage expires. Your new insurer will not cover any
claim/circumstances of which you had knowledge prior to the effective date. Failure to
report a "claim or circumstance" could very well create a gap in coverage.
If you have any questions please call the Legal Malpractice Insurance Hotline at (800) 238-2667 ext 5754 or ext. 5755.