Communication is a key to a healthy attorney-client relationship. Client input is critical for the attorney to develop an understanding of the underlying events and the client’s goals. However, when it comes to litigation strategy, the attorney must tread carefully when the client disagrees with the suggested approach. In this scenario, who’s the boss? By one account, the “scope of representation” is one of the “thorniest issues involved in legal practice” yet it is widely misunderstood. Often, the attorney who understands the ethical principles …
Continue ReadingAuthor: Seth L. Laver
HOA Lessons from Sanford, Florida
Since Trayvon Martin’s February 2012 death, HOA liability and neighborhood watch groups have become a bit of a hot button topic. Following Martin’s altercation with George Zimmerman in the Florida housing complex known as The Retreat, Martin’s parents initiated a wrongful death suit against the HOA. Reportedly, that lawsuit recently settled for approximately $1 million. Now, some HOA’s are rethinking risk management strategy and have taken a closer look at neighborhood watch groups in particular.
At its most basic level, an HOA is often …
Continue ReadingFlying Under the Radar: Taxing Frequent Flier Miles
Many professionals travel frequently. Hence, professionals may accumulate various rebates, discounts, frequent flier miles or “cash-back” as a result of travel or credit-card incentive programs. Over the years there has been some chatter amongst tax-preparers as to whether those travel-related or purchase perks are considering taxable income. Let’s take a closer look at this risk management issue facing the accounting profession.
We start with the general rule: all income is presumed to be taxable. But like most issues facing professionals, the devil is in the …
Continue ReadingEroding Policy Limits Spur Litigation
Professional liability insurance policies each contain limits of liability that set the upper threshold that the insurer will fund. However, a policy’s stated limit does not necessarily correlate to the amount that will be available to resolve a claim. Instead, many policies provide that the costs of defense are included within the coverage limit—every dollar spent on defense correspondingly erodes the amount available to resolve the claim. These so-called eroding limits, or defense-within-limits policies become particularly important in heavily litigated cases, where high defense …
Continue ReadingHefty Audit Malpractice Case Dismissed due to Lack of Reliance
It is inevitable that blame will be cast on the auditor: when an investment tanks, when embezzlement is discovered, when stocks take a plunge. It is the independent auditor that concluded that the financial statements were presented fairly and therefore the auditor should have uncovered the ______________. Many plaintiffs follow this script. As a result, the defending auditor is left to argue that he is not responsible for the intentional acts of others or unforeseen changes in the underlying client’s business. This defense requires a …
Continue ReadingCertificate of Merit Blunder Results in Dismissal
A growing number of states have enacted some version of an “affidavit of merit” statute in professional malpractice matters. The intended purpose behind these laws is to reduce “unnecessary” or unsupported lawsuits. In states such as Pennsylvania, New Jersey, and others, plaintiffs in malpractice litigation must certify through an impartial professional in the defendant’s field that there is a fundamental basis for the complaint. While the specifics of the particular statute in each state may differ in terms of scope and application, the …
Continue ReadingA First of its Kind: FDIC v. Independent Auditor
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 …
Continue ReadingStatus Update: Facebook “Likes” Receive Constitutional Protection
Social media issues arising out of the workplace are ever-changing. Your friends at Professional Liability Matters recently discussed the potential consequences to employees for posting objectionable personal information on Facebook. However, a novel decision from the Fourth Circuit Court of Appeals on Wednesday may turn the tables on employers who take retaliatory action against employees based upon their Facebook activity. Spoiler alert… Facebook “likes” are protected free speech under the First Amendment.
In Bland v. Roberts, 2013 U.S. App. LEXIS 19268 (Sept. 18, 2013), …
Continue ReadingGood At-Will Hunting: At-Will Employment Put to the Test
While most countries allow employers to dismiss employees only for cause, employment relationships are presumed to be “at-will” in all U.S. states except Montana. As a result, most employers are well aware that employment relationships in the States may be terminated at any time, for any legal reason. But, the at-will presumption is a default rule that can me modified by contract whereby the employee may hold a reasonable expectation of continued employment. The modification of employment terms by way of contract was recently put …
Continue ReadingPleading the Fifth in the Civil Context
Dropping the nickel, a/k/a pleading the Fifth Amendment is most often referenced on TV dramas in a criminal setting. Most civil practitioners do not encounter the Fifth and therefore may be unfamiliar with its role in civil litigation. However, since the line between civil and criminal liability is not entirely clear in some scenarios impacting professionals, there may be situations when the Fifth is appropriate, albeit risky.
The Fifth Amendment to the U.S. Constitution provides that “no person shall be … compelled in any criminal …
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