Archive for July, 2012

Valuing Securities Fraud Lawsuits

Tuesday, July 31st, 2012

A new study has attempted to create a viable model to determine settlement amounts for securities fraud lawsuits.  As an article on the study in Forbes Magazine notes, this is an area of particular interest as securities class actions represent 35-40% of all class actions and 75% of all money paid out to settle such cases, running to billions of dollars a year.  The most interesting aspect of the article (to me) is the concept that there is a “rational settlement marketplace.”  This is a concept that lawyers and insurers deal with on a daily basis in valuing cases, but few lawyers have ever studied empirically, other than looking at jury verdict amounts (at least to my knowledge).

-Josh J.T. Byrne, Esquire

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Pennsylvania Dentists Now Required to Have Liability Insurance

Thursday, July 26th, 2012

Dental malpractice cases are not uncommon.  A new law in Pennsylvania, Act 65 of 2012 (S.B. 388) requires all dentists to carry professional liability insurance.  The law requires practicing dentists carry insurance of at least $1 million per claim.  Most dentists already have professional liability insurance, and the law, which goes in effect in August, should not be a significant change for most practices.

-Josh J.T. Byrne, Esquire

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Who will pay Sandusky’s legal costs?

Tuesday, July 24th, 2012

A second law suit has been filed by an insurance company attempting to get a ruling that they do not have to pay Jerry Sandusky’s legal bills.  Last week, State Farm filed a federal lawsuit seeking a declaration that Mr. Sandusky’s home owner’s insurance policy will not pay for injuries caused by intentional, willful or malicious acts, and that they do not have to pay for defense of criminal or civil actions brought against Mr. Sandusky.  Last December, Federal Insurance Company, which insured Mr. Sandusky’s charity, The Second Mile, filed a similar action.  In June, the court ruled that Federal Insurance Co. had to keep paying for the defense costs, but would not have to indemnify for any judgments.

-Josh J.T. Byrne, Esquire

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Another List of Good Habits

Friday, July 20th, 2012

Here is a nice excerpt from the ABA/BNA Lawyers’ Manual on Professional Conduct to add to our list of lists on legal malpractice avoidance.  This one has a particular emphasis on billing and non-payment issues, which are a leading cause of professional liability actions.  There are any number of articles you can find with some version of : “Suing your clients will lead to a legal malpractice action” or “Is suing your clients ever a good idea.”

-Josh J.T. Byrne, Esquire

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Hospitals Without Insurance

Tuesday, July 17th, 2012

The New York Times has published an interesting article on troubled hospitals in New York which are not maintaining medical malpractice insurance.  The article (and common sense) suggests this may be a “good” short term fiscal choice, it is generally not sustainable long-term.  This is not a new issue as uninsured or underinsured hospitals have been in the news for years.  According to one recent report, nearly three quarters of hospitals are now self insured.  While self insurance by hospitals is regulated, the required limits are quite low.

-Josh J.T. Byrne, Esquire

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Limited Scope Engagements

Wednesday, July 11th, 2012

We have previously written on the importance of defining who you represent and for what purposes you represent them.  There are situations in which an attorney may wish to limit the scope of his or her representation.  This is referred to as a “limited scope engagement” or “discrete task representation.”  It is of particular importance that attorneys define the scope of their representation when they agree to represent for only part of a transaction.

Recently the Philadelphia Bar Association, in conjunction with the Pennsylvania Bar Association, has set forth some guidelines on how to handle limited scope representation.  The joint formal ethics opinion of the two bars number 2011-100, addresses limited scope representation and concludes that such representation is “permitted and encouraged by the Rules of Professional Conduct.”  The Committees note a “lawyer should secure the informed consent of his or her client to the terms of the engagement and fully inform the client as to the ramifications of this type of representation.”  As with every area where one is seeking a client’s informed consent, legal malpractice avoidance best practices would suggest you get it in writing.

One of the more interesting subsections of this opinion deals with the subjects of “ghostwriting” and whether a limited scope engagement need be disclosed to the court or opposing counsel.  The Committees conclude that undisclosed limited scope engagements are generally acceptable.

-Josh J.T. Byrne, Esquire

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Malpractice Issues in Business Transactions

Monday, July 9th, 2012

CNA recently released the results of a study of approximately one thousand closed legal malpractice cases arising out of business transactions.  Highlights of the study include:

The leading cause of business transactions claims – the improper preparation, filing and/or transmittal of documents – accounts for more than one-third of claim volume. Failure to provide appropriate legal advice, the second leading cause, represents approximately one-fourth of these claims.
The cost to defend a business transaction claim is more than twice the cost of claims resulting from other areas of practice.
Attorneys who dedicate more than 25 percent of their practice to business transactions are less likely to have a claim asserted against them. However, those claim losses are on average significantly more expensive than those brought against attorneys who only dedicate 5 percent or less of their practice to this area of law.

The study includes a very nice section on managing the risks in business transactions.  Most of the types are standard practice for malpractice avoidance.  Worthwhile reading for anyone who practices regularly in the area of business transactions, and even more so for those who practice irregularly in the area.

-Josh J.T. Byrne, Esquire

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Blogging about client’s cases

Wednesday, July 4th, 2012

We have previously blogged about our golden rule for social media: do not post anything you would not want seen blown up as an exhibit at trial.  A couple of states have recently weighed in with some other “advice.”  The California State Bar Standing Committee on Professional Responsibility, in its opinion 10-00001, has stated that social media posts which could be construed as advertising (ie. “Won another personal injury case.  Call me for a free consultation.”) are subject to the state’s ethics rules on advertising, including the necessity of a disclaimer.

Meanwhile, in Virginia, a Circuit Judge panel has reversed an admonishment against attorney Horace Hunter for blogging about his clients’ cases without their permission.  The case which created significant buzz in legal blogging circles after the admonishment last October, was apparently reversed on first amendment grounds.  The case is interesting to contrast with the California ethics opinion, as the rational for the initial discipline was that the posts were advertising without proper disclaimers.

-Josh J.T. Byrne, Esquire

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