In many professional liability insurance claims against lawyers, the defendant lawyer will confess that “I knew I shouldn’t have taken this file” or “I had a bad feeling about this case”. Before you take a file, you should think about whether you have the expertise, the experience, and the time to take on a matter in an area of law (or in an area of the country) which is unfamiliar to you. It’s one thing to stretch yourself and rise to a challenge, it’s another thing to take on matters which you’re not quite competent to handle. It’s important to turn down cases when you don’t have the required time or resources to devote to them. If a case is being offered to you on a contingency fee basis, carefully consider whether you have the financial resources to carry the case. If it’s clear that you can’t adequately investigate and pursue a matter because of constraints on your time, send the potential client elsewhere as soon as possible. Clients who have unrealistic expectations, or who talk about “just wanting to make their point” or “teaching someone a lesson” can be extremely difficult. Clients who see conspiracies everywhere are seldom easy to represent. And always proceed with caution where the client has had other lawyers before you. As Insurance Department staff at one Law Society are quick to warn: “never be the third lawyer on a file”.
(Excerpt from Issue #35, CLIA Loss Prevention Bulletin)
Failure to communicate effectively with clients is the common factor in a large percentage of errors or omissions claims and also in a huge number of complaints to the Law Society. Law Society discipline staff report that a significant number of the complaints they receive involve lawyers not returning phone calls or not advising the client about what is happening on the file. While failing to return a phone call may not be negligent or actionable per se, a client who feels neglected, uninformed, snubbed or ignored is far more likely to bring a claim than a client who has been consistently kept “in the loop” by his or her lawyer throughout the process.
Perhaps the simplest way to keep your client informed about what is happening on a file is to send copies of correspondence and pleadings. Some law firms make efficient use of what is essentially a form letter, generated by support staff, enclosing a copy of the most recent correspondence and inviting the client to call the lawyer if they have any questions. A low-tech but ingenious twist on that concept is the very effective use of a rubber stamp reading “Forwarded to you by ABC Firm for your information”. A client who is kept informed and up-to-date by letter, email or phone call (even, or especially when the news is bad) is less likely to sue you or to write a letter of complaint to your governing body.
(Excerpt from Issue #151, CLIA Loss Prevention Bulletin)
Safe and Effective Practice, edited by Barry Vogel, QC and written by Jean Côté and others, is a loss prevention resource that has withstood the test of time. This handbook of loss prevention materials, published by the Canadian Lawyers Insurance Association and based upon materials distributed as early as the mid-1980s, remains relevant to lawyers across Canada even after all these years.
For example, the authors note five “persistent fallacies” that lawyers cling to about legal malpractice:
The authors explore how these beliefs fail to protect lawyers from claims and go on to detail a wide range of simple, yet effective strategies to prevent malpractice claims.
(Excerpt from Issue #47, CLIA Loss Prevention Bulletin)
Lawyers often report a potential insurance claim on a matter they have taken on for a friend or relative. These are among the most embarrassing claims for the lawyer and among the most difficult to defend for the insurer. Be especially wary if friends or relatives approach you to act in areas of law where you don’t practice. Taking on an unfamiliar kind of legal matter requires extra time and greatly increases your chance of committing an error. If you do decide to act for friends or family members, even for free, you owe the same duty of care to them as you do to paying clients. To avoid problems, don’t talk about the file at social occasions or around the dinner table. Make these clients come to your office. Open a file. Send them letters, including an opening letter setting out the terms of your professional relationship and what you will and will not undertake for them. Include whether you will bill them and, if so, on what basis. Make clear the amount of disbursements you anticipate and who will pay for them. Report to your clients periodically, in writing, on the status of the file. If you meet with them on the matter, make notes for your file. Include notes of conversations you inadvertently have in your living room or at a hockey game. Make sure their file data makes its way into your office conflicts system and into your limitations system. Not getting paid will not relieve you of your professional responsibilities.
(Excerpt from Issue #20, CLIA Loss Prevention Bulletin)
Email has become the preferred way lawyers and clients communicate – but are you documenting these communications properly? Here are some common mishaps to avoid:
These few tips will help keep your client files organized, current and easily accessible for you and your staff.
Lawyers in all areas of practice continue to be the targets of bad cheque scams. Fraudsters retain the firm on a contrived legal matter so that they can run a counterfeit cheque or bank draft through the firm’s trust account and walk away with real money. Don’t be complacent and think you will never be fooled. These frauds are getting more sophisticated. The matters will look legitimate, the fraudsters will be very convincing and the client ID and other documents you receive will look real. The fake cheques will be printed on real cheque stock and in the past have fooled bank tellers and branch managers. There are often two or more people collaborating to make the scenario even more convincing (e.g., the lender and the debtor, the lender and the borrower, both ex-spouses, etc.). When the bad cheque or draft bounces, there will be a shortfall in the trust account. These scams may involve real estate transactions, debt collections, business loans, IP licensing disputes or spousal support payments.
Here are some red flags that may indicate a matter is a fraud:
Proceed with caution if you are suspicious that a matter may not be legitimate. Make sure you understand and are comfortable with all aspects of the transaction. Dig deeper and ask questions about anything you don’t understand. Review the steps in identifying and protecting yourself against fraud found under the Insurance and Risk Management Section on the Law Society’s website under Fraud and Scams.
Attached you will also find an updated list of names associated to the various types of email scams which continue to be circulated to our members.
Access to justice is an ongoing problem across Canada and the call is out for lawyers to contribute to the solution.
The Canadian Bar Association’s Task Force on Access to Justice issued a final report, Envisioning Equal Justice. The Task Force set targets to bridge the growing gap between those who can afford legal services and those who are eligible for publically funded legal services (i.e. legal aid). One of those targets is that by 2020, all lawyers will volunteer legal services at some point in their career. Around the same time, the Action Committee on Access to Justice in Civil and Family Matters issued a report calling on lawyers to support access to justice initiatives. The Action Committee proposed that lawyers continue delivering pro bono and “low bono” (low-cost) legal services. Whether you’re new to pro bono or you’ve provided low and no cost legal services throughout your career, you need to ensure you manage risk in your pro bono files.
You have the same professional obligations to a pro bono client as you do to one who is paying your fees. And your pro bono client will likely have the same expectations of you as if you were sending out bills.
To manage your risk on a pro bono file, remember always to:
In other words, treat your pro bono files with the same care as you would your paid files. Your clients deserve no less. (Excerpt from Issue #59, CLIA Loss Prevention Bulletin)
From a claims prevention point of view you get more for your risk management efforts by focusing on improving client communications and by getting things done on time. Below are a few tips for avoiding an insurance claim.
None of us like to think about disasters, and perhaps we even have an “it won’t happen to me” attitude. Regardless of the size of your firm, you might want to consider implementing a plan which will assist you, or anyone in your office, if there were an unexpected business interruption affecting you, your staff or your firm.
This short quiz will help you determine your ability to survive some common “disaster” scenarios and provide you with the basis for a Business Interruption Plan.
(Excerpt from “Managing Practice Interruptions”, LawPro)
A lawyer represented a busy salesman on several commercial matters including some litigation files. During meetings to discuss his commercial files, the client mentioned he’d been involved in a car accident and complained about the trouble he was having getting his insurer to pay for the damage to his car.
The client recalled that he may have asked the lawyer to call the insurer to flush things out and that, before the limitation date expired, he showed the lawyer some documents indicating that the insurer would not acknowledge the client’s claim.
The lawyer, on the other hand, recalled that although they did discuss the insurance problem generally, she was given no details. She said the client formally retained her to resolve the claim against his insurer five days after the limitation date expired. Only then did she open a file and receive documents.
In fact, the client thought he had retained the lawyer to help on his insurance matter a full two months before the lawyer thought she was hired.
The moral? If your multiple-file client casually brings up a new matter, be alert. Clarify whether or not you are retained on that new matter. Then memo the file.
(Excerpt from Issue #20, CLIA Loss Prevention Bulletin)
When you file a lawsuit, beating the statute of limitations is not your only concern. You must also ensure that you’ve named the proper defendant. Malpractice claims arising out of failure to name the proper party are common. Here are two illustrations:
1. Lawyer asks associate to draft a claim for client, who was in an automobile accident. The police report says the driver of the other vehicle was Mr. X, so associate names Mr. X as defendant. Just before the limitation runs out, lawyer files the statement of claim. Mr. X gets the claim against him dismissed, because his son was actually the driver. By now the limitation has passed, and lawyer is barred from suing the correct defendant.
2. Client slips and falls at convenience store. Lawyer reviews convenience store’s business licence, which is issued to PDQ Corp. Three weeks before the limitation date, lawyer files suit against PDQ Corp., which files bankruptcy, causing a stay of the personal injury action. Long after the limitation date passes, the stay is lifted and discovery begins. In response to a question, it is learned that someone other than PDQ Corp. was the occupier.
In each situation, lawyer relied on a single source to identify the defendant: a police report, a registrar, a business licence. A more complete investigation would have disclosed the proper defendant. What’s more, lawyer waited until the last minute to file the lawsuits and lost any opportunity to correct mistakes. To reduce the likelihood of malpractice claims from naming the wrong party, take these precautions:
Before filing the lawsuit, investigate thoroughly
Police reports, medical reports, and such documents can contain incorrect information. Insurance companies may name the policy owner rather than the alleged wrongdoer on their correspondence to you. Your client may not remember the name of the wrongdoer. Talk to witnesses. Research public records. If a corporation is involved, find out when it was formed and if it remains active.
File the lawsuit early
Give yourself enough time to correct a mistake if one is made. Filing early lets you conduct discovery to make sure you have named the correct party.
Stay alert to clues that you have named the wrong party
Pay attention to the defendant’s statement of defence; if you’ve named the wrong party, it will contain key denials that signal your error. Clues about mistaken identity will also be found in answers to interrogatories and deposition questions. Make sure you are not so caught up in prosecuting the case that you fail to pick up on these clues and take appropriate action.
(Excerpt from Issue #124 CLIA Loss Prevention Bulletin)
The Lawyers’ Insurance Programme is seeing an increase in spear phishing email frauds targeting lawyers and law firms. The spear phishing messages we are seeing are very sophisticated. The messages are intended to trick the recipient into making a payment or transferring funds to someone outside the firm.
A sample of the latest communications we have received on a phishing attempt appears below. In this case, the email appeared to come from a member in their capacity as President of an Organization, with their correct address showing in the “From:” line, but all replies were actually going to an address firstname.lastname@example.org
From: Member in a capacity as a President of an Organization
Sent: June-08-17 6:29 PM
To: Another Member in capacity as a Treasurer of an Organization
Subject: *Quick Update’s*
How are you?
We have a payment that needs to be made, i need you to arrange a transfer of $7,900.00 to a vendor today.
kindly confirm to me if you can get this done, so i can send you the vendor/consultant details. E-mail me for questions
You can learn more about spear phishing attacks in the attached LAWPRO Magazine article Don’t Take the Bait on a Spear Phishing Attack .
Lawyers who retire but continue to hang around the office can pose a liability risk both to themselves and to their old firms. As the baby boom generation hits retirement age, more lawyers will find it attractive to keep an office at their old firm, so they can continue to mingle with former clients and fellow lawyers. But consider the prospect of a former client mistaking some friendly chat as advice about her legal situation and acting on it to her detriment. If she sues, the retired lawyer who will have no malpractice insurance may have to pay his own legal bill, which could wipe out years of hard-won earnings. The bottom line is that lawyers who are not insured must not dabble in law.
(Excerpt from Issue #20, CLIA Loss Prevention Bulletin)
There is no doubt that technology has increased the pace of practicing law. While increasing efficiency, the constant flow of new products and applications can create just as much anxiety. The key is to use technology – don’t let it use you.
Here are a few examples of how technology has complicated legal practice, and what you can do to cope:
(Excerpt of September 2015 Edition of LawPro Magazine)
Almost everyone has data in the cloud, although many people may not realize it. If you are using Gmail or another free email service, iTunes, Facebook, LinkedIn or other social media tools, Dropbox, or doing online banking, your data is in the cloud. The “cloud” is the very large number of computers that are all connected and sharing information with each other across the Internet. If you create or post information that ends up outside your office, you are most likely in the cloud.
Cloud computing offers many benefits to lawyers. There is a vast selection of services, software and applications that can assist with just about every task in a modern law office, in many cases allowing those tasks to be accomplished more efficiently and quickly. Many of these services permit remote access, thereby allowing lawyers and staff to work from anywhere with full access to all documents and information for a matter. Using these services is usually economical as they can significantly reduce hardware and software maintenance costs and capital outlays. Storing data with suitable cloud service providers will likely mean that it is more secure and better backed up than it might be in a typical law office.
However, placing your client or firm data in the hands of third parties raises issues of security, privacy, regulatory compliance, and risk management, among others. Firms should have a process in place to ensure due diligence is performed and all risks and benefits are considered before any firm data is moved to the cloud. The evolving standard from U.S. ethics rules and opinions seems to be that lawyers must make reasonable efforts to ensure any data they place in the cloud is reasonably secure. Contracts with any third party that is in possession of confidential client information should deal with relevant security and ethical issues, including having specific provisions that require all information is properly stored and secured to prevent inappropriate access.
When considering your options, keep in mind that a cloud product or service designed for lawyers may have been developed with the professional, ethical and privacy requirements of lawyers in mind.
(December 2013 Issue of LawPro Magazine)
A well-written fee agreement encompasses more than your hourly, flat or contingent fee; it should define the parameters of the work to be completed, and address your obligations to the client, and the client’s obligations to you. It should also address your rights (e.g., to seek withdrawal) and your client’s rights (e.g., to terminate representation). Be clear in the language you choose.
Avoid legalese. Use common language that is clear to your clients. Remember, because you are the person drafting this document, it is possible that any error or ambiguity may be resolved against you if a fee dispute later arises.
A comprehensive written fee agreement should address the following issues:
(Excerpted from Managing the Finances of Your Practice Booklet by the Lawyers` Professional Indemnity Company)
From an insurance risk and management perspective, we cannot express often enough the importance of effective communication. We remind lawyers about the importance of properly documenting their files and to provide clear instruction to their associates and support staff when delegating work.
But what can you do to ensure you understand the instruction you have received from a supervising lawyer in your firm and avoid unnecessary mistakes?
Here is a list of questions you can use to make sure you receive clear direction before tackling an assignment:
Taking the time to be proactive will save you time correcting mistakes later on, help avoid a possible claim, and allow the supervising lawyer to know that they have picked the right person for the job!
Ransomware attacks continue to affect many lawyers across the country. Ransomware attacks are a form of “digital blackmail” that:
“…will systematically scramble the files on the victim’s computer, locking them with a digital key to which only the criminal has access. Victims are then unable to read the files, which could potentially cripple a business, especially if the data is critical to its operation. Once in the snare of the criminal, the victim must make a payment to receive the key, causing the ransomware to automatically unlock the files.”
(Excerpt from CLIA Loss Prevention E-Byte, June 2017)
There are three typical scenarios that lead to conflicts claims: failure to screen for conflicts; failure to recognize conflicts despite screening; and fooling oneself into acting, despite a conflict. All three scenarios have the same potential to lead to a claim against the lawyer.
To avoid a Conflict of Interest Claim, follow these simple steps:
Finally, be alert to activities, on the part of potential clients, that may be designed to create “tactical” conflicts. For example, some clients, particularly in communities with a limited number of lawyers, have been known to contact multiple lawyers in an attempt to make it difficult for opponents to find counsel who are free of conflicts. One way to avoid being the target of these tactics is to instruct anyone who answers the phone to use a screening form designed to collect sufficient information to identify existing conflicts, while avoiding the collection of confidential information that would create a new conflict. Where a potential client does not retain the lawyer after making this kind of contact, it can be useful to send a non-retainer letter to make it clear that no solicitor-client relationship was created.
(Excerpt from LawPro, June 2013)
In recent months, our members have been targeted (and almost caught) in the following two types of fraudulent scams.
Equipment/Inventory Purchase Fraud: In equipment/inventory purchase fraud scams, a lawyer is retained to act on the purchase of a large piece of commercial equipment. The fraudster will provide documentation about the equipment, or whatever else is involved in the transaction.
The lawyer will be asked to deposit a cheque into the lawyer’s trust account and to wire the balance (after fees are deducted) to an overseas account. Of course, the cheque is fraudulent and the lawyer will be left with a shortfall in the trust account.
In this type of scam, the fraudsters will often use the details of a real company, including web address, names of real employees and the mailing address. The contact phone number and email, however, will be fake.
Business Loan Fraud: In business loan fraud scams, a lawyer is contacted to help an out of Province creditor collect on a business debt from a purported debtor in the lawyer’s jurisdiction. The fraudster will provide documentation about the loan.
When the lawyer has sent a demand letter (or sometimes, before a letter has even been sent) a cheque will arrive. The lawyer will be asked to deposit the cheque in the trust account and wire the balance (after fees are deducted) to an overseas account. Of course, the cheque is fraudulent and the lawyer will be left with a shortfall in the trust account.
How to Handle a Real or Suspected Fraud
If you are acting on a matter that you suspect might be a fraud, or if you have been targeted by any of these frauds please forward any of the emails and supporting documents that you have received to email@example.com. We will talk you through the common fraud scenarios we are seeing and help you spot red flags that may indicate you are being duped. This will help you ask appropriate questions of your client to determine if the matter is legitimate or not. If the matter you are acting on turns out to be a fraud, we will work with you to prevent the fraud and minimize potential claims costs. We will also post this information on the Law Society’s Website and send warnings to practicing members. We do not disclose the names of firms that have provided us with information.
What can you do to help put a stop to the fraud attempt?
You can simply stop replying to the fraudster’s emails or inform them that you suspect fraud and will not act on the matter. If you have a fraudulent cheque you can destroy it or send it to the fraud department of the financial institution it is drawn upon. You can also report the fraud to the Canadian Anti-Fraud Centre or report the fraud attempt to the police.
What if the fraud has been successful?
If you have been successfully duped, please immediately notify the Lawyers’ Insurance Programme as there may be a claim against you.
Fraud Prevention Information
Identifying Fraud, some tips to consider to protect yourself against fraud and a list of names associated to the various types of email scams which continue to be circulated to our members locally can be found on the Law Society’s website under the Insurance and Risk Management section.
Law societies across Canada have noticed an uptick in banking fraud activities as a result of more relaxed banking methods. With mobile banking, for example, a cheque deposited by photograph or scan remains physically in the hands of the depositor who can then go to a bank and deposit it again, perhaps to a different account, or request cash. For this reason, members should implement careful controls to ensure cheques issued by the firm have not been altered or negotiated more than once and have controls on deposits by staff and, if electronic deposits, should have rules about the circumstances under which such deposits are permitted – if at all permitted – and about deposit receipts and cheque retention.
Below you will first find a Summary of Noted Problem Areas as determined from the experiences of law societies across Canada. Not all of these problem areas are related to mobile or electronic banking. After that, you will find some Suggestions for Safeguards against problem areas.
Summary of Noted Problem Areas
Most of the problems noted above have not been discovered by the banks. Instead, it is the issuer of the cheques who usually makes the discovery during reconciliation or when examining cheques returned by the bank. Banks will not necessarily take responsibility for errors or frauds of the types mentioned, or if they do, then their responsibility may be time-limited. Because the bank may resist liability, you should consider speaking to your bank about its policy regarding these problems.
Suggestions for Safeguards
Confirming the filing deadline as soon as you open your file, properly diarizing the date, as well as filing the Statement of Claim well in advance of the limitation date can help avoid a claim being filed against you.
But here are some of the “dangers” you should be aware of in your practice that can lead to a limitation period slipping between the cracks:
Paying particular attention to the firm’s systems during these times can help you avoid missing a limitation period and a claim for negligence filed against you.
Homewood Health, your Professional Assistance Provider, is pleased to release the September 2018 edition of their Life Lines newsletter, “Addiction & Recovery.” This newsletter looks at what an addiction is, what treatment options are available for various addiction severities, and how to support someone with an addiction.
This newsletter is intended to support health and wellness by providing our members, their family members and their employees with useful information and tips. You may find other editions of the newsletter on the Insurance and Risk Management section of the Law Society’s Website at https://lsnl.ca/lawyers/insurance/resources/
The practice of law is laden with risk. The difficult problem that lawyers face is what they can do to reduce risk without devoting so much time to risk management that it interferes with the practice of law. The Lawyers’ Insurance Programme has developed a Loss Prevention Self-Assessment Checklist that members can use to identify particular risks that may have developed in their practices. Once those risks are identified, members can then take steps to eliminate or reduce risky practices.
This Checklist has been developed with a particular focus on addressing the following top three causes of insurance loss, which together represents 95% of insurance claims:
Completion of the Self-Assessment Checklist will qualify for a one hour credit towards the Mandatory Continuing Legal Education activity for 2018.
Suing a client to collect an unpaid account almost guarantees you will face a counter-suit alleging negligence. In most cases that allegation of negligence will be completely unfounded, but it still will trigger a duty to report a claim to the Lawyers’ Insurance Programme.
Here are some suggestions to avoid suing for unpaid fees:
Remember that communication is key. Keeping a client informed about the current status of their case will allow the client to understand the work that was performed and why the work was necessary. An informed and happy client is more likely to pay their invoice.
Lawpro (Law Society of Ontario Insurers) recently published the following article that we believe beneficial to send to our insured members.
New and exciting opportunities – and claims risks: Marijuana law
As recreational marijuana makes its way onto Ontario store shelves, lawyers are gearing up for the new market. From producers to retailers, and everything in between – retail stores, physicians, banks, transportation companies, accountants, you name it – clients will come from all segments of industry. Here we take a look at some of the opportunities and give some tips to minimize claims risks.
New producers, distributors, and retailers may seek advice from corporate lawyers to establish their businesses. This can include incorporation, drafting and negotiating contracts such as equipment purchases, and keeping up with reporting requirements. While many tasks will fall into ordinary “bread and butter” legal work, we note that inadequate investigation has been a growing area of malpractice claims. Investigation can range from corporate searches to asking all the relevant questions in a client interview. Using one practice area example: what might be unique about acting for the landlord or tenant with respect to a pot dispensary lease? Are there additional risks associated with mould, fire hazards or the need for increased security that may impact insurance eligibility or availability? How might these sorts of considerations be addressed in an offer to lease?
Even in a limited scope representation, where a lawyer is approached to complete a small legal task such as drafting an article of amendment or giving summary advice on the wisdom of incorporating, it remains important to fully draw out the facts from the client. As always, document all meetings and what was discussed, along with recommendations and instructions.
While most clients may be well-intentioned, reports in the media are already stating that the demand for recreational marijuana may not be fully met by legal providers, leaving a black market to fill in the gap. Remember that under the Rules of Professional Conduct, lawyers must not “knowingly assist in or encourage any dishonesty, fraud, crime, or illegal conduct.” Corporate lawyers should, as with any incorporation, inquire as to the purpose of incorporation and stay on the right side of the law. Omitting to ask probing questions – purpose, place, people involved, and so on – can put a lawyer at risk if the client is involved in illegal conduct. Don’t become an unwitting tool for mischief. Alternatively, you may have a client who in good faith adamantly believes that the law now allows for something it simply does not. Since this is an emerging area of law, you cannot rely on well-read clients to know the law better than you do, or you both may pay the price.
Given the market opportunity, the temptation may arise to go beyond your practice area and service a client in need. But we caution against this – don’t dabble. While we give this advice generally to all lawyers, this is doubly important in marijuana law. Like a fish out of water, a lawyer dabbling in an area may run afoul of the law in any uncharted practice area, particularly marijuana law. The changing legal landscape, new as it is, may contain traps even for the experienced practitioner, let alone the dabbler. What are the tax implications of a certain course of action? What are the record-keeping requirements? Licensing requirements? Reporting requirements? Myriad obligations can arise from various governing legislation, and the dabbler is at risk of missing these. While expanding your market is good business, so is staying within your capabilities.
With new businesses finding new partners, real estate and corporate lawyers may also find that the fruits of their investigations into their business clients may be relied upon by others. Could a bank require a lawyer to sign off on the legal status of a cannabis producer or distributor? Anti-laundering laws may be onerous. Could a landlord or lender require a lawyer to state that a property is being used legally, or that required licences and permits have been obtained? To the extent the law may require, lawyers should be cognizant of their duties to clients and, if any, to regulators and third parties where relevant.
Lawyers may find that legalizing marijuana is having an impact on them, even if they don’t intend to act on client matters directly linked to it. As recreational drug use may increase, workplaces may be affected when employees take part. Employers, including law firms, may need to determine when the duty to accommodate is triggered, which typically applies to medically prescribed drugs. Ethical or moral judgments seem to be changing with the times, and the law will likely evolve with them. What policies should law firms have? What should employers and employees do in terms of reporting and disclosure? Could this impact a law firm’s health benefits program?
Enterprising lawyers wishing to trumpet their successes in this new practice area on social media may wish to be careful. The duty of confidentiality prevails, and advertising a client’s success on a blog or Twitter may end up backfiring if the client can be identified and does not wish to be. Permission to broadcast success about a client can in some cases be easily obtained, and it is wise to have such consent documented. Legal advice on a blog should also be limited. “Ghost clients” may end up haunting the lawyer should legal advice be provided on social media, however fleeting. A Snapchat may disappear after 30 seconds, but the screenshot does not, and neither, necessarily, does a cached tweet or blog post.
Undoubtedly clients will enter the market and require legal work. Taking advantage of the opportunity, lawyers should ensure clients are kept abreast of the law where relevant, and that costs, timelines, possible outcomes and risks involved are discussed and documented. The changes in marijuana law may well affect lawyers across the board, from law firm management to client management. Keep up good practice habits, avoid dabbling, and stay abreast of new developments.
(PracticePro Avoid a Claim Blog, Posted: 17 Oct 2018 11:38 AM PDT)
Malpractice claims in Wills & Estates practice have increased steadily over the last decade.
Communications issues (often at the time the will is drafted) are the biggest source of these claims. Too many lawyers are not truly listening to the client’s instructions and not probing and questioning the client to uncover facts that may cause problems later. It’s important to read between the lines instead of simply filling in the elements of a will template or precedent.
Wills and estates is an extraordinarily complex area. Lawyers who practice in this area must maintain a working familiarity with a wide range of statutes and may need to apply complex provisions of the Income Tax Act. Law-related errors are more than twice as likely to occur in the wills and estates area as compared to other areas of practice.
Ensuring you understand the client’s needs, knowing the relevant law and avoiding shortcuts can help prevent claims. Detailed documentation of your conversations with, and instructions from, the client can support a lawyer’s defence should a claim be made.
One of the most frequent questions lawyers ask us is “How long do I have to keep my closed files?”
Certainly you don’t have to keep all files permanently – this just doesn’t make practical or economic sense. Nor is the solution as simple as a one-size-fits-all rule for when to destroy closed files.
There are a number of reasons to keep your closed files. Some reasons benefit your client, others benefit you. One key reason is that your file will help you defend yourself against allegations of malpractice. A well-documented file is often the best defence, especially if it contains evidence of the work done on a matter. Sometimes there will be no other source for that information. On many malpractice claims the lawyer and client will disagree or have different recollections about what was said or done – or not said or done.
Consider the consequences of having no file available in the event of an insurance claim:
Developing a formal File Retention Policy can provide direction to firm members on what the firm’s standard file retention period is and help lawyers identify the files that should be kept for a longer period of time.
Credibility is a critical factor for defending malpractice claims and we find claims are difficult to defend successfully if the lawyer has not made efforts to include written or electronic correspondence, notes on personal or phone conversations and other documentation in the file. When it comes down to credibility, judges often prefer clients with specific memories over lawyers with limited or general memories. This is why the information in a closed file becomes so important and why you should not underestimate the importance of a well-documented file.
For these reasons, we encourage members to ensure that files are well documented and handled in accordance with appropriate file closure, retention and destruction procedures. More information can be found in the practice resource entitled Closing, Storing and Disposing of Client Files.
One of the most important things a lawyer can do to avoid an insurance claim is to document client files properly. Without documentation, errors or misunderstandings can occur that give rise to a claim.
Claims statistics for your Lawyers’ Insurance Programme indicate that poor communication with clients and others, failure to confirm or follow written instructions, and disputed instructions, are causes of negligence claims in all areas of law. To avoid such claims, you must constantly strive to ensure that what you have said and what the client has understood are one and the same thing. Developing the necessary discipline to document your files properly will make it possible for you to avoid being the subject of this type of a claim. Here are a few tips:
It is surprising the number of insurance claims that are essentially based on a question of credibility regarding what was allegedly said by the lawyer or by the client. Misunderstandings between lawyers and clients, poor management of a client’s expectations and poor communication by the lawyer can generate a perception in the client’s mind that their case has not received the required attention and that the lawyer has committed an error.
Keep in mind that claims can arise long after the work is completed. From a professional liability viewpoint, following these loss prevention tips might have a major and beneficial impact when defending a negligence claim.
SCREEN YOUR CLIENTS AND CASES.
One of the most effective ways to avoid an insurance claim is to carefully evaluate the potential client before you take the case.
ASK THESE QUESTIONS FIRST:
Insurance claims often result from a lawyer-client personality conflict or from an overly demanding or overly emotional client. You will need to rely more on intuition than logic in this phase of screening. Recognize which personality types you can’t handle and avoid them. Develop and then use criteria for evaluating cases and clients.
WARNING SIGNS INCLUDE:
Stop…before accepting a case, remember that every client could file an insurance claim against you. When in doubt, decline the case! In the long run, an insurance claim can cost you more than a lost fee.
(Excerpt from Issue #60, CLIA Loss Prevention Bulletin)
It is important to adequately document your file. Keep your client advised of what you’re doing. Copy him/her with virtually everything. Confirm in writing instructions received and advice given. Whenever your client fails to follow your advice, document that in writing and keep that file and documentation indefinitely. Without such documentation it is extremely difficult, if not impossible to defend a negligence claim.
When assuming carriage of a matter from another lawyer, don’t assume that all necessary steps to date have been taken by the previous lawyer. Review the file carefully, in its entirety, to confirm that all steps have been taken and deadlines met. This should be your procedure, regardless of whether you take over the file from a lawyer inside or from outside your firm.
Set out clearly what you’re expecting and when you need the task completed. The “to do” or task function on your software program will allow you to detail what needs to be done, to prioritize tasks, assign a due date and delegate the task to someone else. You can keep track of the task as it also remains on your to-do list until removed by you. Have a backup system in place for when you and/or your regular staff are away from the office, either because of illness or holiday.
Have a backup system in place for when your regular assistant is away from the office. Be particularly vigilant of work completed by a fill-in. Deadlines are often missed and other mistakes made when someone not familiar with the file is filling in for your regular assistant. Also, on a long-term basis, take the time to document and cross-train employees on critical office duties and learn them yourself. This will help to ensure that your practice will continue to run smoothly when a key employee is absent or departs with little or no notice.
Manage files and deadlines by conducting regular file reviews. A good management software program will assist you in setting up timelines.
Remember that sending an email or fax does not guarantee that it has been received. Educate your staff to read the fax transmission notice to confirm that transmission was successful. Emails may not have been received or read. Have a system in place for you or your assistant to follow up by phone, especially when the communication is time sensitive.
Don’t dabble in areas of law in which you do not have expertise. Refer the matter to someone who practices in that area. It will save you a lot of time and grief.
Halloween is a time of rattling chains and things that go bump in the night. But nowhere will you hear creepier noises than in that “House of Horrors” known as the law office. Following are 15 scary sounds sure to send a chill up your spine:
From a client: This case is a slam dunk.
From your paralegal: Hey, look what I found behind your desk.
From a prospective client: How about I pay you twenty dollars now and the rest after we go to court?
From a client: You got the year wrong. My accident was in September 2009, not 2010.
From a Judge: One more word and I am holding you in contempt.
From your office runner: Bummer, I got stuck in traffic and didn’t get to the Courthouse before it closed.
From a client: This is not about money.
From your secretary: I’ve got good news and bad news. The good news is I finally found the file that’s been missing for six months. The bad news is the limitation period expired five months ago.
From a prospective client: Sure I’ve had three prior lawyers. But, unlike you, they were all idiots.
From your legal assistant: You mean it had to be notarized?
From a client: Could you please give me the name and telephone number of your insurer?
From your new associate: What does dismissal with prejudice mean?
From a client: I’ve already done all the legal research on the internet. All you have to do is give it to the Judge.
From a client: I am here to pick up my file.
From a Judge: That won’t be necessary Counsellor. I’ve heard enough.
(Lianswers, November 2012)
Homewood Health, your Professional Assistance Provider, is pleased to release the November 2019 edition of their Life Lines newsletter, “Me-Time: Managing Stress and Finding Work-Life Balance”. In this article, you will be looking at why you need “me-time”, you will determine if you are at risk of job burnout and how to prevent it and you will learn how to get additional free time for yourself with time management, environmental and psychological tips.
This newsletter is intended to support health and wellness by providing our members, their family members and their employees with useful information and tips. You may find other editions of the newsletter on the Insurance and Risk Management section of the Law Society’s website at https://lsnl.ca/lawyers-students/insurance/resources/
Beware the pitfalls of using texting as a means of communication with clients. A series of texts can be easily lost forever, through switching either your network provider or type of phone, through accidental manual deletion, by having your phone hacked, or losing your phone altogether. Also, if you become at all distracted during the quick convenience of sending and receiving important texts, you could be glossing over crucial details and instructions between you and your client.
Protect yourself against a potential insurance claim. Keep a trackable record of all exchanges using screenshots and saving/printing all text exchanges with clients. Be sure to regularly back up all of your data.
Or reduce the risk altogether and avoid using texts to communicate with clients. Limit your communications to email, in-person and/or telephone conversations.
While modern technology might allow you to run your practice from various locations outside your office, there are many risks, such as:
Breaches of Confidentiality/Security
Breaches of confidentiality and security can occur in many ways such as Loss or theft of your laptop or PDA; wireless connectivity; metadata in documentation; interception of cell phone conversations; loss of USB keys/flash drives; viruses, worms, middleware, spyware; risk of email interception/wrong recipient.
The theft, loss or destruction of practice related data is disruptive, stressful and financially draining to you. If that data belongs to, or impacts your client, this breach of confidentiality might result in a negligence claim against you, an investigation or fine under PIPEDA and/or a legal ethics and professional responsibility complaint. Remember to treat the documentation/data you create and store electronically on these various devices with the same care you do your paper files. When using wireless connectivity ensure that all possible security features are in place.
Not Effectively Managing the Retainer or Non-Retainer
If you enter into legal discussions in a social setting you run a real risk that the person you spoke to may consider they have engaged you, even if you have never billed them. Even with ongoing clients there is a danger that something mentioned to you casually in a social setting will result in them thinking they have retained you on another matter when you don’t understand that to be the situation.
Every time you talk with a potential client you should be getting their name, address and phone number, the nature of their case and the parties involved so that you can check for conflicts and send out either an engagement or non-engagement letter. If you’re speaking with a potential client outside the office are you getting this information? If you are, where and how are you storing it? Are you able to find the contact details for your potential clients so that you can send the engagement or non-engagement letter when you eventually get back to the office? Do you have the details of your discussions documented?
You don’t want to find yourself in a situation where you get a phone call from a person (perhaps after a limitation period has expired) who says that they spoke to you last summer about their case and they are wondering what you’ve done about it when you didn’t even consider yourself retained. To avoid this situation, send out a non-engagement letter when you do not consider yourself retained, and an engagement letter when you are retained for each new matter.
Not Documenting Advice Given and Instruction Received
Our claims statistics indicate that poor communication with clients and others, a failure to confirm or follow written instructions and disputed instructions are major causes of negligence claims in all areas of law. For this reason, it is important that you document in your file all instructions received and advice given. If you are doing business at the golf course or at your Florida condo there is a real danger that you might not document the advice given or instructions received; or that if you do, the documents aren’t retained in the file. Without such documentation it is extremely difficult to successfully defend a negligence claim against you. As well, when you are giving instructions to your office or making decisions without the complete file you may also forget specific instructions from a client or other important information. Errors that given rise to a claim are easily made this way.
Burnout/Lack of Balance
While it is important for your office to be able to contact you if absolutely necessary, there are many benefits to you being able to take a regular break from the office. Going years without a regular holiday is counterproductive, and is a recipe for disaster both personally and professionally. It almost always results in burnout. Balance is an essential component of a successful law practice. Regardless of when and how your time off is structured, figure out what works for you, but do give yourself those much needed breaks. You will find it will result in more productivity.
The World Health Organization recently declared a global pandemic as the coronavirus (COVID-19), spreads rapidly across the world. The scope of this disease and its potential impacts has clear implications for personal safety and for law office management.
A healthy and available workforce is any organization’s most valuable asset. The coronavirus is very likely to incapacitate some employees and result in other employees being quarantined. A quarantine at your office could result in a major disruption to normal operations, with potentially large numbers of employees working from home or from remote locations – disconnected from easily asking questions of each other or from getting prompt instructions about their work. Now might be a prudent time for law firms to review and update their business continuity plans to assure operational resiliency.
From a risk management perspective, be extra diligent about limitation dates. Almost all areas of law practice are deadline-driven to some degree. Areas such as litigation live and die by deadlines. For this reason it is critical for lawyers to keep an up-to-date calendar and, when appropriate, have it available to select staff. The following steps may assist:
By being proactive and by paying particular attention to the implications of the coronavirus on your practice you can better protect your clients’ interests and your law practice.
The following practical steps for daily operations may be helpful for your law practice and business continuity plan.
Incorporate Health Care Tips and Listen to Health Experts
(This post is adapted from a message from Gowling WLG to their lawyers and staff written by Steve Lundy, which they have graciously offered to share with Avoid-a-Claim readers.)
As professionals and staff adopt the recently implemented remote working arrangement to reduce the risk associated with COVID-19, it is important to understand that this increases Cyber related risk. Cyber criminals thrive in stressful and confusing times. Knowing that the population is preoccupied dealing with monumental change, they have well-rehearsed playbooks that seek to exploit distributed workforces using remote connections. As a result, we are asking professionals and staff to be extra vigilant and take additional precautions.
Among other scams, hackers are circulating phony but legitimate looking:
Hackers are looking to potentially gain control of law firm personnel’s remote access into the firm, or encrypt computers and anything else the malware can reach.
What can I do?
Here are several steps you can take to protect yourselves and the firm:
(“Avoid a Claim” posted March 20, 2020 by LawPro)
It has been estimated that a staggering 1.4 million Canadians will have Alzheimer’s disease and other dementias by 2031. Lawyers of course are not immune to the effects of aging. Whether presented with Alzheimer’s, mild cognitive impairment or dementia, those in management of law firms need to be alert to the changes that may occur as firm members age.
Some of the signs of cognitive impairment to watch for include:
Given that those suffering age-related cognitive impairment are most typically senior and respected members of a firm, every effort should be made to pursue these issues with due tact and concern.
At the same time, doing nothing is not an option when you notice that a colleague appears to be declining in competence. Questions that need to be asked and answered include:
Your Professional Assistance Program is a good place to turn for support and resources to work through this time of transition for both the individual lawyer and the law firm.
(Excerpt from Issue #58, CLIA Loss Prevention Bulletin)
Good practice management supports an effective and efficient practice, often leads to happier clients and helps to prevent complaints and negligence claims.
Here are the Seven Cs of Good Practice Management:
Competence: Recognize your limitations and ask yourself whether you are competent to handle the matter before you take it on. Sections 3.1-1 and 3.1-2 of the Code of Professional Conduct set out the duty of competence and a definition of “competent lawyer”. As noted in commentary  to section 3.1 2, “A lawyer should not undertake a matter without honestly feeling competent to handle it, or being able to become competent without undue delay, risk or expense to the client. The lawyer who proceeds on any other basis is not being honest with the client.”
Conflicts: With conflicts checks, check early, check often and check everyone! Section 3.4 of the Code of Professional Conduct prohibits a lawyer from acting for a client where there is a conflict of interest unless otherwise permitted in the Code of Professional Conduct. So, check conflicts as early as possible and continue to do conflict checks as new parties, witnesses and others are brought into the matter. Be careful of joint retainers and don’t forget to make a note in the file that you did a conflict check.
Calendaring: Your tickler system, bring forward system and file review system are integral to good practice management. Make sure you understand how the systems work and that there is a back-up for each system. Consider the risks of the system you have and mitigate those risks where possible. For ticklers, include several reminders before the true deadline and make sure there is another person responsible for making sure that deadlines are met. Make it a habit to set a bring forward for all of your files to keep them moving. File review is important to ensure that files do not slip through the cracks. And last but definitely not least, do not ignore ticklers and reminders when they come up.
Communication: Good client communication starts from the very first meeting with your client. Make sure the client understands what fees you will charge and when, how accounts will be billed and the services that are and are not part of the retainer. Keep in touch with your clients over the course of the matter by whatever means works for you and the client see: Loss Prevention Tip #2: Communication and Loss Prevention Tip #34: The Pitfalls of Texting with Clients. Consider using standard wording or templates to explain common events in the file. Interim billing is also a form of communication with your client so don’t neglect your accounts.
Contingency Planning: Planning for the unexpected (e.g. fire, flood, pandemic, injury, illness, death, departure of key personnel) is always a good idea. A contingency plan protects your clients and allows you to resume practice with the fewest possible hiccups. For more information on what should be included, see Succession Planning.
Consistency: Being consistent can reduce the chances of forgetting a step in a transaction (and may help you sleep better as a result). Checklists, systems and written policies are all helpful in creating consistency for routine tasks and detail-oriented transactions (e.g. opening and closing files, real estate closings) so make them a part of your everyday practice.
Clear Documentation: Documenting everything in your file benefits your practice in many ways – it gives you a record if you ever need to respond to a complaint or negligence claim, it helps with contingency planning because it makes it easier for another lawyer to work on your file and it can save you from having to re-decide decisions that have already been made if you forget them later. The goal is to have a full and accurate record of the work you have done and decisions that have been made in the file. For more guidance, see Loss Prevention Tip #29: Properly Documenting Files.
Following these Seven Cs is a good way to build the foundation for a long and successful career. For more information, you can view the free webinar (password: 6q$309i+) or contact the Director of Practice Management.
Recently, law firms across Canada have been hit by a computer ransomware virus called MAZE. As a result of this virus attack, they have no access to email, Word, their accounting software, or any of their backups, including cloud backups. Everything is tied up by MAZE and they have been asked to pay an enormous ransom to regain access to any of their work.
Ransomware viruses are often hidden in email attachments. Recently, the infected attachments appear to have been about COVID-19 including:
These emails and attachments can be loaded with malware which can gain control of your remote access into firm computers and encrypt your home and work computers and anything else the malware can reach through your network.
What can you do to avoid ransomware viruses?
Please be careful. Think before you click. And if you notice something suspicious going on with your computer, unplug it and call your IT support right away! Be careful and pass this warning on to staff and lawyers in your office.
Check with the person or firm who provides your IT support and ask if there are additional steps you should be taking at this time. To report a claim and get some advice, email a description of the circumstances to firstname.lastname@example.org; or call 1-833-3831488 (toll free).
Misunderstandings about what actions the client expected the lawyer to take, or the expected outcome/cost of a case, often result in claims.
In fact, in the Lawyers’ Insurance Programme’s portfolio lawyer/client communication-related errors result in the second highest cause of loss in insurance claims at 33%. To further understand the specific communication problems, we have broken this statistic down to seven categories:
Failure to follow client’s instructions = 25%
Poor communication with clients = 24%
Poor communication with others = 23%
Disputed instructions = 18%
Disputed retainer = 7%
Failure to obtain client’s consent = 2%
Unable to contact client = 1%
Being mindful and applying the following keys when communicating may assist you in avoiding negligent claims:
Clear: Make the goal of your message clear to your recipient. Ask yourself what the purpose of your communication is.
Concise: Your message should also be brief and to the point. Why communicate your message in six sentences when you can do it in three?
Concrete: Ensure your message has important details and facts and that nothing deters the focus of your message.
Correct: Make sure what you’re writing or saying is accurate. Also make sure that your message is typo free.
Coherent: Does your message make sense? Check to see that all of your points are relevant and that everything is consistent with the tone and flow of what your want your message to be.
Complete: Your message is complete when all relevant information is included in an understandable manner and there is a clear “call to action”. Does your audience know what you want them to do?
Courteous: Ensure that your communication is friendly, open, and honest, regardless of what the message is about. Be empathetic and avoid passive-aggressive tones.
Think about these keys every time you need to communicate something and you’ll always know you’re delivering the clearest message possible.
(Excerpt from remember-the-7-cs-to-communicate-more-effectively at lifehacker.com)
October is Cybersecurity Awareness Month. This year, with increased cyber-attacks and increased sophistication of hackers, spreading cybersecurity awareness is especially crucial.
Get Cyber Safe is a national public awareness campaign created to inform Canadians about cyber security and the steps they can take to protect themselves online.
As we have stated in past email Loss Prevention Tips, there are some simple things we all can do to help protect our devices from cyber threats. Always use strong passwords, don’t click on links or open attachments without checking they’re valid, use only password-protected Wi-Fi networks and keep your operating system, privacy settings as well as antivirus and anti-spyware software up to date.
Take the Get Cyber Safe Checkup self assessment test to understand how cyber safe you are!
An insurance claim arising from failure to know or apply the law can occur when a lawyer does not have sufficient or current knowledge of the law for the matter on which they are retained. Roughly 11% of the Lawyers’ Insurance Programme’s claim files result from this shortcoming. It is important to be certain you have adequate subject-matter knowledge.
Keeping up is challenging to be sure; in recent decades, the law has become more complex, new case law is produced at a rapid rate, legislation has become more complex too and with it there is the increasing scope of regulations.
The following are some helpful tips for keeping up with the law and avoiding insurance claims:
Subscribe to helpful newsletters, industry publications, blogs and social media within your practice areas to be alerted to new developments that may affect your clients. And in particular, take advantage of the Law Society’s CLE offerings. Many of these offerings provide the opportunity to ask questions and engage with presenters and members who have expertise. CLE question and answer formats can provide a more satisfying learning experience than the printed page alone.
Do Not Dabble in Areas outside your Expertise
Law is complex and diverse, so don’t stray outside your areas of expertise. Recommend your client retain the services of an expert for specialized areas such as tax, intellectual property, or franchise law if you don’t have a thorough knowledge of these or other fields.
Do Not Give Advice on Foreign Law
Your current professional liability insurance policy with CLIA provides protection for claims that result from your “professional services” involving the laws of Canada, its provinces and territories and does not cover non-Canadian law. If your client requires assistance from a foreign agent consider having your client retain a foreign agent directly. Being the conduit for communications between your client and a foreign agent increases your exposure to a claim.
Stay Connected to your Peers
Keep in contact with colleagues in your practice areas through law associations such as the CBA and its committees. Investigate the Law Society’s Mentoring Program by accessing or becoming a mentor. For more information about the Mentoring Programme, contact Janice Ringrose, the Insurance & Risk Manager, for details.
Ask for Help
Ask others for help. Contact Janice Ringrose, Insurance & Risk Manager or Angela Whitehead, Director of Practice Management, for assistance. For general legal research assistance, Jenny Thornhill, Law Librarian, is a great support asset.