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 2011, 253 legal malpractice claims were closed, of which 69 resulted in payouts totaling $6.8 million.
The most common claims were associated with alleged mishandling of cases involving bodily injury and property damage (65 closed claims; 21 paid claims), collection and bankruptcy (40 closed claims, 8 paid claims), real estate (32 claims, 13 paid claims), estates and trusts (27 claims, 8 paid claims), and family law (27 claims, 5 paid claims).
The most common errors leading to a successful malpractice action include those pertaining to the commencement of a proceeding or action (17 paid claims), errors or omissions during pre-trial or pre-hearing (13 paid claims), the preparation or transmittal of a filing (8 paid claims), and consultation and advice (2 paid claims).
The most common type of error was failure to meet a deadline correctly (14 paid claims), planning or strategy error (9 paid claims), inadequate knowledge or application of the law (8 paid claims), and failure to perform an adequate investigation (4 paid claims).
The average payment on a successful claim in 2011 was $99,059, down from $120,014 in 2010.
The majority of attorneys with paid claims had been in practice for over a decade. Of the 69 paid claims that were closed in 2011, 66 were against attorneys with more than 10 years experience.
In 2011, just 10 insurers provided legal malpractice coverage in Missouri, though only four had a market share greater than 1 percent. Just three insurers controlled more than 96 percent of the market:
Insurer Market share
Bar Plan Mutual Insurance Company 68.1%
Continental Casualty Company 16.8%
Professionals Direct Insurance Company 12.0%