Cases for Professional Liability Monthly – January 2013 Edition

Cases provided courtesy of LexisNexis.
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The Importance of Record Retention

All professionals must maintain and follow a clearly documented record retention policy. These policies are more stringent and regulated for some professions. Each of the 50 states maintain regulations governing work-paper ownership and record retention for accountants, for example. Attorneys, too, may be guided by fairly specific record retention policies pursuant to the applicable Rules of Professional Conduct governing lawyers state-by-state. Despite these regulations, all classes of professionals routinely face legal woes as a result of poor record retention compliance. This risk intensifies as a result of cyber risk and associated liability from electronically stored information.
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Attorney Suspended for Operating a Foreclosure Mill

In a recent consent agreement reached with the Florida Bar Association, Attorney Marshall C. Watson, was suspended for 91 days and agreed to shut down his legal practice for his role in operating a foreclosure mill. The issue: may an attorney be held personally responsible for his oversight of a large foreclosure mill? The lesson: even when an attorney’s work-product is not technically negligent, she may still be in violation of ethical rules and subject to strict discipline.
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Chinese Walls Are No Longer High Enough

The New Mexico Supreme Court recently entered a decision with ramifications regarding conflicts of interest in law firms. The issue: may a firm cure a clear conflict of interest by erecting a “Chinese wall.” The lesson: Chinese walls are not as strong as they used to be and some conflicts may only be cured through the disqualification of counsel, and maybe the entire law firm.
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Colorado Shooter’s Psychiatrist Sued for Medical Malpractice

The widow of a man killed in last year’s mass shooting in Aurora, Colorado has filed a lawsuit against the alleged gunman’s psychiatrist claiming she knew of his threats to harm others and failed to warn of the imminent danger. Issue: When is a psychiatrist obligated to warn the public of her client’s threats to the public? Lesson: Threats of imminent harm cannot be taken lightly and preventive measures should be taken despite the application of doctor-patient confidentiality.
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When Your Client Lies: What we can learn from Lance Armstrong

Lance Armstrong’s legal team played a part in each of the racing metals, the Livestrong brand, the endorsements, the accusations, the denials and of course the many lawsuits he filed to defend his reputation. Frankly, in light of the recent confession on Oprah, Armstrong’s attorneys may be feeling a bit uncomfortable.
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Engagement Letters 101 – The Professional Rule Book

The first rule of engagement letters: obtain a signed engagement letter. The second rule of engagement letters: obtain a signed engagement letter. The remaining rules are a bit more complicated. A well written engagement letter is absolutely critical to managing risk. It defines the scope of the engagement and, as a result, sets appropriate expectations with the client. An engagement letter may help to discourage meritless malpractice claims and may serve as “Exhibit A” in a dispositive motion. On the other hand, the lack of an engagement letter may result in an undefined engagement and may promote meritless, protracted litigation.
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Sleeping with the Enemy: When a Consensual Relationship = Medical Malpractice

New York’s high court recently concluded that a consensual relationship between a patient and her family doctor constituted medical malpractice. Issue: Whether a consensual sexual relationship between a married patient and her physician is grounds for a medical malpractice claim. Lesson: When possible, avoid sleeping with your clients.
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Lawyers Found Liable For Fabricating Asbestos Claims

A jury in West Virginia just awarded nearly $500,000 in favor of a transportation company for claims arising from an alleged conspiracy between two plaintiffs attorneys and a radiologist who fabricated asbestos claims. The issue: may an attorney be held liable for unfounded claims? The lesson: completely research the applicable law and facts before accepting an engagement to provide legal services.
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Continuing Fallout – The Penn State Scandal Spawns a Legal Malpractice Lawsuit

At least one of Penn State’s former attorneys is now under fire for her role in the investigation into the Jerry Sandusky scandal. The issue: did the attorney represent the University or its administrators? The lesson: document the scope of your representation.
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