Professional Liability Matters, Author at Professional Liability Matters

IRS Warns CPAs: Beware of Phishing

Businesses are increasingly becoming the targets of sophisticated cyber-attacks, and professionals are no exception. When cyber-criminals breach a professional service firm, they not only may gain access to the firm’s corporate data, but also confidential information from the firm’s clients. Therefore, it is incumbent on all professionals to make data security a priority.

In order to combat this threat, the IRS recently issued a warning to accountants and tax preparers about a new phishing scam intended to access professional and client information. The phishing …

March 6, 2017 Accountants / Defenses

CPA Takes Advantage of Procedural Quirk

The idiosyncratic nature of the Louisiana legal system is one that is noted, if not explored, in many law schools around the country. Even as early as high school, many teachers will explain that Louisiana is unique insofar as its legal system is based primarily on Spanish and French civil law, rather than the British tradition used in the other 49 states. The differences between Louisiana and the rest of the country do not end there, however, and a large accounting firm was recently successful …

March 1, 2017 Legal Malpractice / Malpractice Defenses

Family Feud leads to Privity Lesson

A somewhat bizarre family feud presents an interesting evaluation of the general requirement of privity in order to maintain a legal malpractice claim. Consider the circumstances of when an attorney is appointed by the court to administer an estate. Who is the client? A Kansas appellate court examined this situation in Schroeder v. Brewer, 2017 Kan. App. Unpub. LEXIS 101 (Kan. Ct. App. Feb. 17, 2017) which addresses whether an attorney may be held liable for legal malpractice while representing an Estate “against” the …

February 27, 2017 Conflicts / Design Professionals (A&E)

Sign, Sign, Everywhere Assign

Professionals owe a duty to their clients to satisfy the standard of care commonly exhibited by others within their profession. Consequently, privity is often required to maintain a malpractice claim; i.e. it is often the client with the exclusive right to sue her professional. This narrow application of standing assumes, however, that clients have retained their exclusive right to sue. In fact, as with many torts, clients may freely assign their right to file malpractice actions to third parties, even those that are adverse to …

February 21, 2017 Coverage / Director and Officer Liability

Attorney + CEO = Coverage Denied

Attorney? Check. CEO? Check. Coverage? Unlikely. Some attorneys wear multiple hats. We have other interests, other business ventures, other opportunities to make a buck. Attorneys are often exposed to other areas of business depending on the nature of their practice. Through their role as counsel, or through other opportunities, some attorneys become more directly involved in non-legal businesses. The more traditional route is to switch to in-house counsel, but sometimes attorneys will go so far as to start a new company. While both are commonplace …

February 2, 2017 Legal Malpractice

Blown Deadline = $850,000

Ugh…deadlines. Many classes of professionals are bound by deadlines. Attorneys are no different. Pleading requirements, discovery responses, motions, hearings and other proceedings must all be calendared to ensure that an attorney meets all deadlines. In fact, an easy path to malpractice is to miss a deadline. A recent New Jersey verdict highlights the importance of complying with deadlines and maintaining clear and open communication.

In the underlying case, Plaintiff hired Attorney to pursue an action against a number of parties for their negligence in designing …

February 1, 2017 Real Estate Professionals

Title Insurer off the Hook for Closing Agent Misconduct

The closing of a home loan often involves multiple parties, and even a sophisticated buyer can be confused as to who represents whom. The individuals present can include representatives from the bank, real estate agents, title insurance agents, etc. However, each person in the room has a specifically defined role, and it is important for all parties to be aware of what these roles are.

In a recent Pennsylvania case involving the misappropriation of loan funds, the Superior Court ruled that the role of a …

January 24, 2017 Miscellaneous Professionals

Appraiser Targeted for Foreclosed Home

It has been almost a decade since the subprime mortgage crisis rocked financial markets across the world. In response, we saw the introduction of the Dodd-Frank legislation, civil suits against many of the country’s largest banks, and the emergence of a new market for purchasing defaulted loans. Since this initial flurry of activity, the economy has slowly recovered and the topic largely disappeared from the public eye. However, the legal wake continues to reverberate in the foreclosure litigation arena, with mortgage holders continuing to search …

January 20, 2017 Ethics / Legal Malpractice

Does Client Know You’re Uninsured?

Between required law school classes and the Multistate Professional Responsibility Examination, attorneys are given considerable training on the rules of professional conduct before starting a career. Attorneys get further refreshers on the rules when reviewing potential clients and the occasional issues that arise during representation. But how many attorneys review the rules of professional conduct that apply to the specific jurisdictions in which they practice? Considering the heavy overlap between the different states and model rules of professional conduct, doing so may seem like a …

December 29, 2016 Risk Management / Technology

Liability for Inadvertent Metadata Disclosure

In the modern practice of law, attorneys are expected to be familiar with discovery of electronically stored information. Often this involves the production of files in their native format, which preserves metadata such as the document author, dates of creation and alterations, and where the document was stored. Production of electronic information thus facilitates document review, but also could lead to the disclosure of information that is beyond the scope of permissible discovery.

In a recent opinion, the State Bar of Texas considered the …