Attys Brace For Tidal Wave Of Pandemic-Era Malpractice Suits

By Andrew Strickler
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Law360 (September 24, 2020, 8:22 PM EDT) -- A confluence of economic, emotional and technological woes inflicted by the COVID-19 pandemic will stir up a storm of lawyer-targeted lawsuits and insurance claims in the coming months and years, a panel of professional liability experts said Thursday.

In a grim kickoff to a "virtual" conference on legal liability and malpractice claims, members of the American Bar Association panel noted that some of the "we're in this together" attitudes that sprang up between opposing counsel in the spring and early summer already appear to be fading.

Others also raised evidence of more "quick trigger" judicial temper with bickering lawyers and foot-draggers, predicting that trend will also mean more attorneys being hit with sanctions and bar ethics referrals as the crisis drags on.

Factor in the profession's historic struggles with substance abuse and unfamiliar tech tools — not to mention widespread financial stress of COVID-19 closures — and you're looking at malpractice pain that may well linger for many years.

Whittney Dunn, risk manager for malpractice insurer The Bar Plan in St. Louis, Missouri, said COVID-19 hasn't created new malpractice risks as much as exacerbated many of the well-known factors that drive up claims. Key to weathering the coming storm, she said, will be lawyers talking through problems and billing headaches with their stressed-out clients.

Attorneys, many of whom may be hitting their own personal or professional skids, should also take a deep breath before pressing clients to pay bills or threatening to sue, even over money the lawyers might desperately need.

"This is going to be a time when client communications are going to be worse than they've ever been, unfortunately, and when clients are going to be more needy," Dunn said.

The cloudy forecast came in the kick-off discussion at the ABA's annual fall National Legal Malpractice Conference, which traditionally draws hundreds of lawyers and professional liability insurers to a hotel conference center.

Originally slated for three days of hors d'oeuvre plates and handshakes in Chicago, this year's truncated event is completely online. Still, it managed to attract scores of lawyers and others from across the country to log on.

Unsurprisingly, the first panel focused on COVID-19 and its accompanying ethical and malpractice risks. The allotted 75 minutes hardly seemed sufficient.

Dunn and her fellow panelists ran through a long series of troubling aspects of the crisis for practitioners in terms of upset clients and allegations of lawyer negligence.

The list included the abrupt and near total new reliance across the profession on technology; more lawyers working without support, "check-ins" with colleagues, and other safety nets; stress-induced client avoidance; emotional breakdowns and alcoholism; and pay cuts and lost jobs.

While the real depth of those problems is not yet clear, several panelists noted that previous economic crises have also pushed many lawyers to "dabble" in unfamiliar areas of the law or take on risky clients — both well-known triggers for lawyer liability.

The brave new world of Zoom trials and new client "introductions" made through email alone also carries a host of potential ethical and malpractice pitfalls, including in unforeseen client conflicts.

Nicole Hyland, a professional liability specialist at Frankfurt Kurnit Klein & Selz PC, said she's also seeing a recent "lessening of trust" among lawyers that their opposing counsel aren't using an online format to text answers to a client during a deposition, to name one example.

That in turn raised the question of whether lawyers doing the online interview have to start tailoring their questions to anticipate such misconduct — and protect themselves from a possible negligence claim down the road.

"If you don't ask those questions, are you going to be viewed as dropping the ball if it turns out later there were some shenanigans?" she said.

Anne Thompson, chief claims officer for Lawyers Mutual Insurance Company of California, predicted that in the coming months her company and others will start to field "incident" reports from lawyers and firms about clients unhappy with their pandemic employment matters, broken business deals and bankruptcies.

The profession can also expect to see an uptick in allegations that lawyers were involved in Ponzi schemes or misused corporate assets, even if the industry's recent claims data doesn't yet reflect those trends, she said.

"What we hope not to see, but inevitably will see, is scrutiny over prior documents," she said. "'Why didn't my lawyer figure out there was going to be a pandemic and that my contract wasn't going to withhold force majeure provisions or other types of pandemic closures or breeches?'"

And despite some "slack" given in recent months to attorneys who blow deadlines or otherwise fumble, that goodwill won't provide any legal protection down the road, she warned.

"There is going to be no special treatment for lawyers who fell below the standard of care because of COVID," she said. "There has to be that same heightened security and ... acting as a fiduciary even if your own life as a lawyer is falling apart."

--Editing by Amy Rowe.

Correction: An earlier version of this article misstated the title of Whittney Dunn. The error has been corrected.

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