Legal Malpractice Report
Executive Summary
Legal malpractice insurance covers attorneys for claims arising out of the performance of their professional duties. Malpractice claims generally assert that the attorney rendered substandard services that fell below generally accepted standards. For example, suits 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 2010, 242 legal malpractice claims were closed, of which 61 resulted in payouts totaling $7.3 million.
The most common claims were associated with bodily injury and property damage (57 closed claims; 20 paid claims), collection and bankruptcy (37 closed claims, 4 paid claims), estates and trusts (34 claims, 12 paid claims), family law (30 claims, 8 paid claims), and real estate (24 claims, 2 paid claims).
The most common errors leading to a successful malpractice action include those pertaining to the commencement of a proceeding or action (15 paid claims), the preparation or transmittal of a filing (10 paid claims), pre-trial or pre-hearing (3 paid claims), and consultation and advice (3 paid claims).
The most common type of errors were failure to ascertain a deadline correctly (13 paid claims), planning or strategy error (10 paid claims), inadequate investigation (5 paid claims), and inadequate knowledge or application of the law (5 paid claims).
The average payment on a successful claim in 2010 was $120,014, up slightly from $92,691 in 2009.
The majority of attorneys for whom payments were made had been in practice for over a decade. Of the 61 paid claims that were closed in 2010, 59 were against attorneys with more than 10 years experience.
In 2010, just 9 insurers provided legal malpractice coverage in Missouri, though only four had a market share of greater than 1 percent. Just three insurers controlled more than 96 percent of the market:
Insurer Market share
Bar Plan Mutual Insurance Company 69.5%
Professionals Direct Insurance Company 13.7%
Continental Casualty Company 12.9%