In 2024, claims trends continued on the same course we have started to notice over the past few years. Here are a few examples of types of claims and reminders as to what you can do to avoid becoming part of next year’s claims highlights!
Estate Planning Claims – To no one’s surprise, the frequency of claims stemming from Estate Trust & Probate increased by 1.6% according to the ABA Standing Committee on Lawyers’ Professional Liability Profile of Legal Malpractice Claims published this year. ALPS has seen similar increases in these types of claims. States have been gradually expanding the standing of non-client beneficiaries to sue attorneys and with the largest transfer of wealth in history, it’s no surprise that more claims are presented. These claims generally stem from unhappy beneficiaries; improper titling/placement of assets (ie. failure to transfer assets into a trust); incorrect transfer deeds and failing to record deeds prior to the testator’s death; missed tax filing deadlines and conflicts of interest. These claims can be fact specific and not subject to motion practice making them expensive and time consuming. In these types of claims, documentation is the key to protecting yourself.
Real Estate Claims - These have continued to increase, up .81% according to the ABA Standing Committee on Lawyers’ Professional Liability Profile of Legal Malpractice Claims published this year. ALPS has also seen increases in real estate claims arising from the classic failure to identify and pay liens; failures to identify property restrictions in deeds; and conflicts of interest claims arising when attorneys serve as the closing agent. Again, the key to safeguarding yourself from these types of claims is to ensure that you double check your title searches, (particularly if a paralegal or contract abstractor has done the initial search). Disclosures/documentation if you are the closing attorney can also go a long way in preventing and defending claims arising from cases arising from real estate closings.
Personal Injury Claims – Although the frequency of these claims has decreased slightly (they were formerly the top area of practice leading to malpractice claims), claims in this area continue. As one may guess, these most often arise from failure to timely file the case. These would include failing to identify that the defendant is a governmental entity and missing the tort claim deadline; failing to calendar the date correctly so the statute of limitations is missed; or failing to notice that a different/shorter statute of limitations or service deadline exists in certain cases. Somewhat surprisingly, most of these errors are made by attorneys some years into their practice who fail to double check their research, believing they already know the law. ALPS has talked extensively in prior articles about best practices for setting up calendaring systems to ensure that the correct dates are entered.
Another trend we have noticed in the personal injury field is the “settle and sue” claim. A client elects to settle the case and later, has buyer’s remorse and sues the attorney claiming that the attorney failed to work up the case properly so that the client was forced to settle for less than the case was worth. Again, documentation of settlement discussions and pros/cons/risks/benefits can go a long way in preventing or defending against these types of claims.
Insurance Defense Claims – this is another troubling trend that we have noticed in the past few years. Insurance carriers who retain defense counsel to defend their insureds refuse to follow the defense counsel’s advice and then sue the counsel after trial when the result is unfavorable. Yet again, clear communication and documentation of the risks and benefits are key to preventing and defending these types of claims.
Technology claims – ALPS is also seeing claims alleging that attorneys have failed to correctly advise clients who have secretly recorded the adverse party, wanting to use those recordings in court. Tread very carefully in these situations as there are many state and federal laws that apply to these situations and could subject your client to criminal prosecution. We suggest that you refer these questions to a criminal lawyer and document that you have done so before allowing your client to provide you with the recordings.
Fraudulent Check/Wire Fraud Claims – ALPS has been warning of these schemes for years yet we continue to see Insureds and clients fall victims to these schemes as they are ever more sophisticated. As we have stated, always use an “out of band” authentication on every single wire transfer and never wire funds without waiting for the check to clear your bank. Remember that the bank’s statement that the “funds are available” does not mean that the check has cleared.
Hopefully by reviewing the above-referenced common claims, you are able to take a few preventive measures to avoid finding yourself in one of them in 2025!
Stacey Smith Claims Manager : Aug 19, 2021
Kobi L Gibbs, Senior Claims Attorney : Feb 27, 2018
