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Ch. 11 Legal Malpractice Insurance Declarations Page

Ch. 11 Legal Malpractice Insurance Declarations Page. named insured; policy period liability limits (per claim; annual aggregate); amount of deductible claims expense allowance amount of premium; whether any endorsements . Insuring Agreement.

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Ch. 11 Legal Malpractice Insurance Declarations Page

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  1. Ch. 11 Legal Malpractice InsuranceDeclarations Page named insured; policy period liability limits (per claim; annual aggregate); amount of deductible claims expense allowance amount of premium; whether any endorsements

  2. Insuring Agreement • Coverage: claims for civil liability arising from act, error or omission relating to professional services rendered (or not rendered) to another in capacity as lawyer • Exclusions: • For conduct not arising from the practice of law (other business pursuits) • Intentional torts, criminal conduct • punitive damages, fines & monetary penalties • Employment, family disputes

  3. F. Handling claims • Prompt notice to carrier & duty to cooperate • Contract duty under policy (actual & potential claims) • Pragmatic: claims repair Carrier’s Coverage Issues • Contract duties: 1) defend + 2) indemnify, if claim within terms of coverage and not basis to deny coverage

  4. Carrier Options • Usually • Fully defend & indemnify if claim within terms of coverage and not basis to deny • Defend under specified reservation of rights (letter or non-waiver agreement) • Very Risky & Rare • Deny coverage (claim not covered, within exclusion or insured’s failure to satisfy policy condition) • Rescind (policy procured through fraud, misrepresentation, non-disclosure)

  5. Notice to client? • When required • Restatement §20, Cmt. c. “If the lawyer’s conduct of the matter gives the client a substantial malpractice claim against the lawyer, the lawyer must disclose that to the client.” E.g., failure to file timely claim or appeal (text p. 422) • Colo. Eth. Op. 113 (2006): spectrum (likelihood of prejudice); known facts & circumstances

  6. Problem 11-3 Why (& how to) give client & insurer bad news? p. 424 • To carrier • Possible differences among carriers (mutual company vs. for-profit, publicly owned) • Assess relationship with, availability of claims prevention/claims repair • Possibly first consult privately with ethics expert knowledgeable of coverage issues • Oral or in-person vs. written notice

  7. Problem 11-3 Why (& how to) give client & insurer bad news? • To client • Possibility of malpractice suit & that conflict requires withdrawal • How to disclose to client (very carefully, after lawyer receives sound guidance from carrier and perhaps ethics expert)

  8. Compare OK & ABA 1.8(h)(1) • ABA permits agreement prospectively limiting malpractice liability IF client is independently represented in making the agreement. • OK flat out prohibits prospective limitation of malpractice liability. • Cmt 14 in both: restrictions do not prohibit lawyer from entering agreement to arbitrate legal malpractice claims.

  9. ABA & OK RPC 1.8(h)(2)NO DIFFERENCE A lawyer shall not (2) settle a claim or potential claim for such liability with an unrepresented client or former client unless that person is advised in writing of the desirability of seeking and is given a reasonable opportunity to seek the advice of independent legal counsel in connection therewith. Cmt. 15 (because) of danger that a lawyer will take unfair advantage of an unrepresented client or former client, the lawyer must first advise such a person in writing of the appropriateness of independent representation in connection with such a settlement.

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