Author Archives: James Gilroy

Bankruptcy Law Preempts State Claim for Wrongful Use of Civil Proceedings

The Automatic Stay under U.S. Bankruptcy law is a powerful tool in the judicial system. By filing for bankruptcy, a person or entity immediately creates a cocoon of safety that is generally impenetrable without subjecting the offending party to punitive repercussions. In fact, even parties without knowledge of the bankruptcy filing may nevertheless face consequences from the presiding bankruptcy court for violating the Automatic Stay. Of course, this does not mean that parties can use a bankruptcy petition solely to protect themselves from outside pressures. The bankruptcy rules also allow a court to impose sanctions upon a party or its attorney if it the petition is found to have been filed frivolously. However, a Pennsylvania trial court recently reaffirmed that it remains within the bankruptcy court’s sole discretion to do so, and that any similar state court claim is preempted by federal law.

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What are Professional Services and Why it Matters

Clearly, it is the specific terms of an insurance contract that dictate whether certain claims are covered or denied. In an interesting decision out of Illinois, the court faced the question: when is an attorney practicing law “in the service of another” and how does that impact coverage. This distinction was critical to whether a claim against an attorney would be covered by a commercial general liability (“CGL”) policy.

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Lawyer Sanctioned for Employee’s Misconduct

An attorney can’t be held accountable for her client’s breach of the Rules of Professional Conduct, right? Wrong. Model Rule of Professional Conduct 1.15 provides that a lawyer cannot commingle a client’s property (i.e. money) with the lawyer’s. Seems simple enough: don’t mix personal with business. However, what happens when the lawyer complies with this standard but her employee doesn’t? According to a Texas state court, the lawyer is still responsible.

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Perusing Privileged Papers Prohibited

What to do? When reviewing discovery provided by your adversary you stumble upon a privileged document. It happens…sometimes privileged materials fall through the cracks and into the hands of opposing counsel. Do you read it, burn it, return it? According to a recent New Jersey decision, reading an inadvertently produced privileged document may be grounds for disqualification.

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The Ethical Concerns of Blogging Professional Successes

Professionals have embraced social media as a means to promote their businesses and market their professional successes. Managing social media accounts and writing blog posts allow professionals to directly communicate with prospective clients and advance their brand. However, professionals must be cautious that marketing tactics in the new age of digital media do not run afoul of traditional ethics rules and statutes regulating advertising and communications with clients.

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Fiduciary Exception Limits the Attorney-Client Privilege

The attorney-client privilege encourages full and frank communication between attorney and client, whether the client is an individual or a large corporation. Protecting confidential communications promotes broader public interests in the observance of law and the administration of justice. However, in shareholder derivative actions alleging harm by the corporation against stockholders, some courts have held that the corporate attorney-client privilege should be balanced with the interests of the shareholders, and that the privilege may therefore be subject to limitations. This is known as the “fiduciary exception,” which was recently upheld in Delaware.

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Forum Shop to Avoid Malpractice

Have you considered the possibility that attorneys are susceptible to malpractice for failing to initiate suit in the venue most advantageous to their client? Forum shopping is a common term for the practice of initiating a claim in the court thought most likely to provide a favorable judgment. Whether it’s due to the laws of that jurisdiction, a more sympathetic audience, convenience, the fact-finder, or myriad other considerations, the venue may make a big difference. But, as we learn from a recent decision, the attorney that picks the wrong door may be exposed to a malpractice suit.

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Confidentiality Issues in High Profile Litigation

It was nearly 20 years ago when a white Ford Bronco sped down an Los Angeles highway containing O.J. Simpson. Some believe that the trial that followed changed litigation, but there have been a number of trials that have garnered international attention since: Oscar Pistorius, Michael Jackson, and Amanda Knox are more recent examples. Attorneys involved in high-profile litigation have unique responsibilities to consider when balancing obligations to the client with immense pressure imposed by the media and the public. In particular, confidentiality issues are prevalent in these types of cases as the media probes for sexy details. This makes an attorney’s job more difficult. Confidentiality agreements may help, but they are not a sure thing as demonstrated by a recent decision.

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Stop; Hammer (Clause) Time

Litigation is big business with big dollar signs. As a result of the large awards that can result from malpractice suits, many professionals, their attorneys, and insurers are interested in early settlement discussions. When considering settlement, the defense team must balance “right and wrong,” pride, defense costs, and other complicated factors that are difficult to quantify. For the professional, the decision may be more about reputation and morals than budgets. As a result, insureds may not always want to follow their insurer’s inclination to settle. Enter the “hammer clause.”

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Real Estate Transactions Pose the Greatest Risk of Attorney Malpractice

According to a recent study, real estate transactions pose the most risk to attorneys of a malpractice claim. In its annual survey, the American Bar Association reported a higher percentage of professional liability claims stemming from real estate dealings than any other area. Over the past several years, plaintiff personal injury claims topped the list, but to the joy of the plaintiff's bar and the chagrin of real estate professionals, that trend is apparently changing.

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