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Are legal malpractice claims on the rise?

A recent study by insurance broker Ames & Gough found legal malpractice claims continued to rise in 2020. The group has conducted surveys to gather information about legal malpractice claims for the last ten years, and states that claims with multi-million-dollar payouts “spiked for the second year in a row.”

Another concerning trend noted by the study: claim frequency is also on the rise.

What has caused the increase in legal malpractice claims?

According to the study, the most common cause of action was conflict of interest, both actual and perceived. Researchers with the study also note business transactions and corporate and securities were the areas of law most likely to face allegations of malpractice last year. This is the fifth year in a row this area of law has topped the list of malpractice claims.

Why? Business leaders depend on their legal representation to help guide them through these transactions and represent their best interests. When an attorney fails to do so, millions are at stake. This can lead to serious business losses and frustration. Business leaders are often savvy and can catch on if their attorney failed to uphold their end of the deal. As a result, business leaders will likely take steps to hold a legal professional accountable if their counsel played a role in a deal that goes sour.

Do experts expect the trend to end?

A reduction in claims is unlikely. Those with the study predict an additional wave of malpractice claims after the pandemic, similar to the surge following the 2008 recession.