Vol. 78, No. 12 December
Personal Injury Lawyers Beware
Personal injury practice gives rise to the greatest number of legal
malpractice claims, especially document errors and claims that the PI
lawyer failed to perform due diligence in seeking all insurance policies
that could benefit a client.
by Thomas J. Watson
Personal injury practice continues to be the riskiest practice area
for lawyers. Nearly 25 percent of malpractice claims made against
lawyers arise out of personal injury (PI) practice, according to the
National Legal Malpractice Data Center. Thirty-three percent of defense
and indemnity dollars spent by Wisconsin Lawyers Mutual Insurance Co.
(WILMIC) since 1990 resulted from PI representation.
Thomas J. Watson, Marquette 2002, is director of
communications at Wisconsin Lawyers Mutual Insurance Co., Madison.
As if PI lawyers don't have enough pitfalls to avoid, another pitfall
is the failure to discover and pursue all potential insurance policies
that could provide proceeds to their clients.
Performing Due Diligence
Suppose you represent a client who suffered a serious back injury in
an automobile accident that was not his fault. You settle the bodily
injury claim for the adverse party's $50,000 policy limits. Your client
A few years later, the client's back injury flares up and he can no
longer work. The "flare up" turns out to be a permanent injury, related
to the auto accident, that results in a substantial loss of income.
When the former client consults a worker's compensation attorney, the
client discovers there was an underinsured motorist insurance (UIM)
policy in effect at the time of the auto accident. That policy would
have provided the client with an additional $250,000 of insurance
coverage for his accident-related injuries. This UIM policy, of course,
was never brought to your attention when you settled the auto accident
Should you have known about the UIM policy? Brian Anderson, WILMIC
claims counsel, has seen several cases in which a lack of due diligence
claim regarding the discovery of insurance policies was made against the
lawyer. "The theory against the lawyer is that he or she has an
obligation to investigate, pursue, and secure all insurance policies
available to the injured client." This means you may have a duty to
contact insurance agents and carriers, as well as the client's family
members who may have more information about insurance coverage than the
client brought to you.
"I've seen cases where the client tells the lawyer `I'm satisfied
with the settlement offer on the table' and the lawyer goes ahead and
settles the case," says Anderson, who practiced primarily PI law for 11
years before joining WILMIC. When additional insurance coverage is later
discovered, the client may have a change of heart. "Reasonable diligence
by the lawyer in securing insurance proceeds may go beyond relying on
what your client brings to your attention. That just isn't enough."
A client may jeopardize his or her ability to later make a UIM claim
by accepting a policy limits settlement from the adverse party. Anderson
says, "If a future insurance claim is later denied or is no longer
available after you recommend the client accept a settlement, you could
be found liable for the client's lost coverage opportunity." This is
especially true if you failed to fully explore all possible insurance
Wrongful Death Claims
Finding all the insurance policies with potential proceeds for your
client can be especially challenging in wrongful death cases. For
instance, the beneficiary on whose behalf the claim is made may not be
aware of an umbrella policy that provides additional insurance benefits
beyond the underlying policy that was brought into your office.
"Beneficiaries are often unaware of all the policies available to
them under which a claim could be made," Anderson says. "That's why it
is so important for the lawyer to really do some digging. It may be
difficult, but the alternative can be much worse."
Make the Client Do Some
Anderson suggests that clients should be encouraged to find as much
information as possible. This may include asking family members,
insurance agents, and others about policies that may exist. "At the very
least, before recommending a settlement, make sure your client has done
everything in his or her power to uncover any potential policies."
Other Common Mistakes
Uncovering available insurance policies is only one part of the PI
lawyer's job. More malpractice claims arise due to mistakes in
preparing, filing, and transmitting documents than in any other type of
activity in PI cases, according to the most recent study by the ABA's
Standing Committee on Lawyers' Professional Liability.
Anderson says the biggest complaint is missed deadlines. "More than
35 percent of all personal injury claims involved missed deadlines," he
says. "Failure to file within the applicable statute of limitations is
the most common mistake we see in claims."
Other common mistakes leading to malpractice claims include:
- practicing out of jurisdiction;
- notice problems in claims against municipalities, the state, or
individuals employed by the state or a municipality;
- failing to prosecute claims or judgments against a debtor or adverse
- failing to prosecute or prepare a claim and retain experts;
- failing to diligently move a claim forward;
- failing to comply with scheduling orders;
- failing to overcome summary judgment motions;
- failing to respond to counterclaims;
- failing to pursue or negotiate subrogation claims and claims made by
- failing to accurately account for a client's medical bills; and
- failing to be straightforward with a client regarding the realistic
value of a claim.
The following case illustrates other typical errors:
A woman suffered a serious neck injury in an automobile accident. The
woman's attorney presented a substantial settlement demand based on his
client's medical records, reports, and documentation he gathered on the
case. He advised the woman to reject any settlement offer that did not
meet the demand based on the apparent strength of his client's case. He
then filed a lawsuit on her behalf.
During discovery and after the plaintiff's independent medical
examination, the attorney met with the plaintiff's primary treating
physician. To the attorney's surprise, the doctor indicated that most of
the plaintiff's current complaints and all future medical expenses that
she was likely to incur were directly attributable to a degenerative
neck condition the plaintiff had at birth and were not related to
injuries she sustained in the accident. The plaintiff was forced to
settle the case in an amount far below the initial settlement offer.
The client blamed the attorney for not preparing her case better or
advising her properly about the initial settlement offer.
What mistakes were made in this case? First, the attorney should have
obtained the client's complete medical history before assessing the
value of the case. Second, the attorney did not meet early enough with
the client's primary physician to determine the full extent of the
client's injuries and their causes. Third, the attorney did not gather
the medical records as early as he should have to help determine whether
the case warranted the filing of a suit.
That attorney is not alone. Those mistakes are among some of the
common missteps made by PI lawyers, whether they practice PI full time
or only occasionally.
Personal injury attorneys often run into malpractice claims due to
unreasonable client expectations. Anderson says, "Approximately 20
percent of personal injury claims involve procrastination by the lawyer
who knows a claim is weak, but doesn't want to disappoint the client. If
you are prosecuting a weak claim, it is vital to be upfront with your
client early on in the process. If you can't agree on the value of the
claim, it's best to seriously consider turning down the client."
From a malpractice standpoint, claims against PI lawyers are the most
frequent type of claim and the most expensive to defend. While a
settlement can compensate a plaintiff for financial loss, the pain,
physical limitations, and lifestyle changes caused by a personal injury
may remain long after a settlement or verdict.
Anderson says many personal injury victims ultimately feel
dissatisfied after their case has concluded. This can leave their
attorney as a vulnerable target. "Sometimes, people who are suffering
may blame the lawyer who tried to help them, especially if they are not
satisfied with the end result of their claim." Implementing risk
management strategies that include due diligence can help you avoid
being one of those targets.