As Real Estate Market Sank, Legal Malpractice Claims Rose
Although the worst of the mortgage meltdown was then still in the future, a ABA study of legal malpractice claims from 2004 to 2007 showed that related legal malpractice claims rose as the real estate market fell.
Such legal malpractice claims are up about four percentage points, according to the just-released Profile of Legal Malpractice Claims: 2004-2007, reports an American Bar Association press release.
The study was discussed earlier this month during a national malpractice conference in San Francisco sponsored by the ABA Standing Committee on Lawyers’ Professional Liability. It also sponsored the malpractice study.
“According to panelists, claims resulting from alleged errors in real estate transactions range from conflicts of interest, closing errors or contract drafting, to zoning or escrow issues. In many states it is not uncommon for only one lawyer to be at the closing table, presenting a huge potential for conflict of interest,” the release recounts.
“Claims for failure to know and apply the law, failure to file documents, and errors in planning or procedural choices are several of the main reasons for alleged malpractice.”
Panelists agreed that to avoid malpractice claims, understanding and managing client expectations is a crucial skill.
Additional coverage:
National Law Journal: “Legal Malpractice Claims Tied to Real Estate Deals Shows Quickest Climb”
Updated at 12:40 p.m. on Oct. 1, 2008, to include link to National Law Journal article.
