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Many attorneys are wondering whether to expect an increase in legal malpractice claims when courts – and society at large – begin to reopen. Such an increase would follow the pattern seen with previous economic declines. For instance, after the 2008 Great Recession, there was a significant increase in legal malpractice claims. However, it took a year for those claims to reach their peak in 2009. That is because the claims against attorneys followed an initial increase in other insurance claims. The number of claims in the five most likely areas for legal malpractice suits – personal injury, real estate, family, bankruptcy and estate law – nearly doubled between 2005 and 2009. Of course, such an increase can be expected during an economic downturn.
In the case of attorneys, following the initial wave of legal filings, the number of legal malpractice claims jumped as well in 2009. A similar increase in malpractice claims occurred in 2012 following the downturn caused by the European debt crisis and the downgrading of America’s credit rating in 2011. Again, the increase in malpractice claims occurred approximately one year after the peak of other types of filings had taken place.
This time, the increase in lawsuits in general likely will take even longer. Courts are reopening slowly, deadlines have been and likely will continue to be extended, statutes of limitations are being tolled, and there will be a significant backlog for the courts. Additionally, the disease itself likely has discouraged many people from going out and finding an attorney. Eventually, though, as people feel the devastating economic effects of the largest unemployment rate since the Great Depression, they will turn to litigation and the hope of a settlement or a large verdict to ease their financial pain. When this happens, legal malpractice suits may follow, as they did in 2009 and 2012.
Yet another factor likely will lead to an increase in malpractice suits that is unique to the pandemic. Even though courts are closed and many jurisdictions have been extending filing deadlines and tolling statutes of limitations, attorneys cannot simply assume that all cases are on hold. Indeed, as is typical, how and when a case is litigated must be evaluated on a jurisdiction by jurisdiction and case by case basis. An attorney’s failure to do his or her due diligence easily could lead to one or more claims of legal malpractice (though it remains to be seen how lenient courts will be to parties that missed deadlines during the pandemic).
Given this potential paradigm, it is essential that attorneys keep track of the rules and approaches by all courts in all jurisdictions in which they practice. Nevertheless, history suggests that we can expect an increase in the number of legal malpractice claims filed, even if it takes a year or two to get there.
If you have questions or would like more information, please contact Anastasia Osbrink at [email protected].