CHAPTER 4 AVOIDING MALPRACTICE CLAIMS IN A NATURAL RESOURCES AND ENVIRONMENTAL LAW PRACTICE
| Jurisdiction | United States |
(2000)
AVOIDING MALPRACTICE CLAIMS IN A NATURAL RESOURCES AND ENVIRONMENTAL LAW PRACTICE
Attorneys Liability Protection Society
Missoula, Montana
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Malpractice claims are a fact of life for professionals. Gone are the days when lawyers and clients had the type of close relationships that precluded consideration of filing a malpractice action. Now, even insurer clients will make claim against lawyers if they believe they can prevail and appropriately recover a portion of their losses. In the 1950s the average malpractice premium, for those few lawyers who carried coverage, was $200 to $500. Today the average is $2,000 to $8,000 depending on the limits of liability, practice specialty and claims history. By anyone's math this exceeds inflation. Policies are broader, limits are higher and the quality of protection is much improved. Nonetheless, the percentage of gross income devoted to malpractice insurance premiums is undoubtedly greater now than in the past.
This is not all bad; for vanishing too are the days when lawyers felt insolated from scrutiny of their professional lives. More than one commentator has opined that lawyers are receiving their deserved rewards in the civil justice system with which they are so familiar. Many more clients with losses are being indemnified than ever before.
What invariably develops after claims increase and losses become more expensive is an ongoing effort to prevent the losses and stem the tide of rising costs associated with malpractice claims. While not embraced by all, lawyers and their insurers are coming to realize that risk management can have a direct correlation with reduction in claims numbers and costs. Natural resources and environmental law practitioners because they are involved in transactional and litigated matters have a number of opportunities to reduce their exposure to malpractice claims. In addition, there are opportunities to control the size of losses once potential claims are recognized. What I will focus on in the remainder of this paper are those activities that offer the best opportunities to reduce professional liability exposures and contain claims costs.
So, what is it we should prevent?
The ABA Standing Committee on Lawyers' Professional Liability has done two comprehensive studies of professional liability claims made against lawyers, published in 1986 and 1997.1 For both of these studies the Committee had insurers complete surveys on thousands of claims closed during each decade. The study is very valuable for insurers as well as attorneys in private practice. However, it does have some limitations. In particular it reports only on claims that were reported to insurers. No one can accurately state the number of attorneys that are not insured in any US jurisdiction, save Oregon.2 In addition the studies do not include the claims resolved by attorneys themselves without reporting to their insurers, a potentially significant number. As in all such study labels must be used and judgments made. The chance that these were uniform
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among the hundreds of claims professionals reporting is small. For our discussion the practice categories were not sufficiently finite to include environmental, natural resource or mineral law. The closest we can come is real estate, civil litigation and perhaps commercial transactions.
One other caution is in order. Keep in mind that the claims reported have to do with allegations, not with claims proven. As up to 40% of all claims made against attorneys are abandoned or dismissed without any indemnity payment, the true measure of claims with merit is but a factor of those claims reported.3 While a few of these may be abandoned due solely to cost, thus arguably having value, most die a natural death because of the inability to prove liability or damages.
In thinking about all of the tasks that environmental and natural resources lawyers do, there are exposures to professional liability claims that are traditionally found in litigation practices and some that are more prevalent in transactional practices. I will treat them here in the approximate order equivalent to the percentage of claims reported from the activity or cause of loss in the ABA publications mentioned.
1. Meeting Deadlines
The 1980s study found that 26% of all claims arose from a failure to have work accomplished on time. Specific areas of omissions included: failure to calendar properly, failure to react to calendar, procrastination and failure to know or find the applicable deadline. The 1990s study found that 28.75% of all claims arose because of deadline issues. It is interesting that the later study notes a drop in claims caused by failure to have or consult a calendar and an increase in the claims due to failures to know or find the applicable deadline or procrastination.
Meeting deadlines is among the most frequently discussed topics for lawyers' risk management. Here are thoughts from the conventional wisdom.
USING A CALENDAR PROPERLY.
As the mission is to avoid any potential for missing a deadline, calendars must always be created and used in pairs. Even for the busy sole practitioner, it is necessary to have a back-up calendar that can be referred to in the office while the attorney is out of the office. The calendars should likewise always be synchronized on as frequent a basis as possible so that entries made by the attorney can be known by the office and visa versa. Additionally, this allows for any conflicts to be discovered and dealt with as soon as possible.
Entries should be made as soon as they are known with telephone numbers and details of persons to be met available in case appointments must be rescheduled.
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The best calendars created by the most organized attorneys include in one record all appointments as well as work that must be done in order to meet deadlines. Doing this allows attorneys to review the amount of work that must be done and control the number of appointments over several days to ensure time for completion and proofreading of all work well before deadlines.
WHAT SYSTEM TO USE?
We have reviewed a few of the software programs available and have preferences for firms of different sizes and those involved in different practice areas. Realize though that new software designed specifically for law firm use comes out regularly. Keeping on top of it would require a large staff. We found that a few months' receipt of Law Office Computing [James Publishing Company (714) 755-5450] provided valuable information regarding the use of computers for scheduling and meeting deadlines. Programs designed to do so are compared by technical over achieving attorney experts regularly.
The reality of the situation is that you do not need to spend a great deal to have a good working system. Essential to the effort are answers to two questions:
1. What is our technology budget for the next five years?
2. What do we want to be able to do with our systems?
A good system has the following attributes:
IT'S EASY TO USE AND RELATIVELY EASY TO INSTALL OR START.
My notes catalog countless tales of firms that have spent thousands for fancy systems that sit on shelves because they are too complex to use. Most software vendors will send a free demo disk. Have those in your office that will use any system try a few before one is selected. Design a procedure that all can use with the least possible effort and a realistic transition procedure and timeframe. Involve the staff. Otherwise, it will not be used regardless of your instructions.
IT QUICKLY PROVIDES AN OFFICE OR PRACTICE GROUP WIDE REPORT FOR ALL TASKS, ALL OFFICE MATTERS AND ALL ATTORNEYS.
This is truly the only way to manage the raw product that all law firms produce: time. The intent is not to unduly invade the privacy of any attorney. But, if someone in the office isn't attending to a case and misses a deadline, the resulting professional liability claim involves the whole firm, not just he/she who made the mistake. We suggest that a firm-wide approach offers a safety net that benefits all.
IT IS REDUNDANT. IF SOME PART FAILS, THE COMMON CALENDAR CAN STILL BE PRODUCED.
Computer programs should be backed up daily and the disks or tapes rotated, and at least one back up should be kept off site. Operators should be redundant as
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well. If the secretary principally responsible is out of the office, someone else should be able to produce the same reports and retrieve the same information.
THERE SHOULD BE AN ARCHIVE FUNCTION.
Regardless of the type of system, it should store who accomplished what calendared task when. That information should be accessible and duplicated for each file at some point, at closure if not before.
WHAT DATES SHOULD BE INCLUDED?
Since we contend that the system must serve all time management needs for the entire firm, it is easier to talk about what dates should not be tracked. In fact there are few, if any. Following are the deadlines for all attorneys and litigators that we especially think must be a part of any successful time management system.
For All Attorneys
Expected Completion Dates for All Projects and Parts of Projects
All files in the office should have at least one task entered in the system. Even if all that is being done for the client is a codicil for a will, the date you expect to complete the work should be entered. If three questions have been identified in a litigated case, and each has been assigned to an associate for research, the due date of each memo should be entered. If you promised the PTA board at the last meeting you would look up the law in a specific area and report back at the next meeting, that due date ought to be on the calendar as well.
Status Reports to Clients
For any work that will take more than one month, a specific date should be entered to remind the...
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