Legal Malpractice Report
Legal malpractice insurance covers attorneys for claims arising out of the performance of their professional duties. Malpractice claims generally assert that the attorney rendered services that fell below generally accepted standards. For example, lawsuits may allege that documents were not properly completed or filed, that errors were committed in the interpretation of law, or that other improper advice was given to a client.
In 2012, 226 legal malpractice claims were closed, of which 49 resulted in payouts totaling $9.2 million.
The most common claims were associated with alleged mishandling of cases involving bodily injury and property damage (42 closed claims; eight paid claims), collection and bankruptcy (37 closed claims, 11 paid claims), real estate (27 claims, four paid claims), corporate and business organization (22 claims, four paid claims), and family law (22 claims, five paid claims).
The most common errors leading to a successful malpractice action include those pertaining to categories not specified (15 paid claims), the commencement of action or proceeding (six paid claims), the pre-trial, pre-hearing (12 paid claims), and the settlement and negotiation (three paid claims).
The most common type of error was the categories not specified (four paid claims), failure to meet a deadline correctly (seven paid claims), planning or strategy error (eight paid claims), and failure to perform an adequate investigation (six paid claims).
The average payment on a successful claim in 2012 was $189,209, up from $99,059 in 2011.
The majority of attorneys with paid claims had been in practice for over a decade. Of the 49 paid claims that were closed in 2012, 45 were against attorneys with more than 10 years’ experience.
In 2012, just 15 insurers provided legal malpractice coverage in Missouri, though only five had a market share greater than 1 percent. Just three insurers controlled more than 92 percent of the market:
Insurer Market share
Bar Plan Mutual Insurance Company 67.0%
Continental Casualty Company 15.6%
The Hanover Insurance Company 9.6%