Your friends at Professional Liability Matters often focus on interpretation of Affidavit of Merit (“AOM”) requirements. As our handy table shows, each state has its own rules as to AOM requirements and other details regarding substance and form. These rules are of critical importance to many malpractice claims. Most states require an AOM from a professional within the same field certifying that the malpractice case has merit. A recent decision focuses on the application of this rule in the med-mal context.
What is a “professional liability” claim? Most definitions would include a claim involving a skilled professional – such as an attorney, accountant, doctor or broker – sued in her professional capacity, based upon allegations of negligence in the performance of professional services. The easiest example is a claim for legal malpractice: a client gets a negative or unexpected result, believes that this result is due to failings on the part of hired counsel, and subsequently brings a claim against his attorney for damages. Pretty cut and dry, right? Nope.
Ever hear the joke about the in-house attorney who was fired for complying with the Rules of Professional Conduct? It’s no joke. Model Rule 1.13(b) provides that if in-house counsel knows that an employee is violating a law that may be imputed to the employer, the lawyer must proceed in the best interest of the employer. But, complying with that rule may result in backlash for the attorney. Take for example the following case, in which the Utah Supreme Court considered whether the rule creates a public policy exception to at-will employment to prevent companies from terminating in-house counsel for reporting illegal activity to management.
Everything is electronic. Companies are increasingly reliant on electronic processes to obtain and store valuable customer data, confidential, privileged and proprietary information. With that increased reliance comes the increased risk that this information can be compromised. In light of many recent high-profile data breaches, litigation surrounding data and privacy protection is increasing. A side effect of this litigation is the attention now paid to the role of boards of directors in managing and responding to cyber liability risks. Boards concerned about potential liability of its officers and directors can look to two recent sources for guidance on this issue.
They say that a truly good settlement is one that leaves everyone unhappy. There is plenty of truth here. But some settling parties take their unhappiness to a new level by filing a malpractice claim. Whether it be buyer’s remorse, doubt, or the opportunity to reconsider the settlement without the distraction of active litigation, some settling parties determine that they took too little or gave too much away. This may be a part of the uncertainty of compromise and often dissipates over time without much fanfare. But sometimes it does not; some settling parties point fingers at their former counsel claiming that bad advice led to an unjust settlement. The result can be the "settle and sue" malpractice claim, which applies differently from jurisdiction to jurisdiction.
Attorneys have an ethical duty to keep a client reasonably informed about the status of the representation. The rules of professional conduct generally require a lawyer to provide the client with sufficient information to participate intelligently in decisions concerning the objectives of the representation. Fulfilling this ethical obligation, however, may sometimes require the attorney to inform the client about personal matters that may affect the attorney’s ability to represent the client’s interest. For example, an attorney may be obligated to disclose her own health condition to a client, especially when imminent death is foreseeable.
A recent decision in a closely watched accounting malpractice matter – the first of its kind initiated by the FDIC - may suggest cause for concern for accountants. As receiver for a failed bank, the FDIC may sue professionals who played a role in the failure of the institution. In the wake of recent bank failures, the FDIC has targeted officers and directors, attorneys, and brokers. Until recently, however, the FDIC had not pursued an audit firm. That all changed on November 1, 2012 when the FDIC, as receiver for the failed Colonial Bank, initiated a $1 billion malpractice claim against the bank’s auditors PricewaterhouseCoopers and Crowe Horwath. This lawsuit, and a recent decision denying the defendants’ motion to dismiss, raise critical questions.
Marketing is a must for all professionals. The quality of a professional’s skills may be wasted unless marketed to, and utilized by, would-be clients. Thus, professionals strive for efficiency in targeting an audience but those efforts are tempered by ethical considerations in advertising. However, solicitation just got considerably easier for attorneys in Ohio who may now reach potential clients via text.