Archive for the ‘Legal Malpractice’ Category

For the fiscal year ending on June 30, 2009, the Client Protection Fund of the Bar of Maryland paid out $975,874 on 62 claims against 41 attorneys.  The reimbursement to defrauded clients ranged from $199 to $315,785.   Just 3 attorneys accounted for 57% of the $975,874 in claims paid.

The Client Protection Fund collects $20.00 from every Maryland attorney each year as an assessment.  The Fund currently has a reserve of $7 million.   The Fund limits an individual claim to 10% of its reserve.

It is unethical for an attorney’s retainer agreement to limit the attorney’s liability for legal malpractice.  Rule 1.8(h) of the Maryland Rules of Professional Conduct forbids an attorney from executing a retainer agreement that prospectively limits the lawyer’s liability to a client for malpractice, unless the client is independently represented in entering into the agreement.    For similar reasons, an arbitration clause contained in a retainer agreement is unenforceable, unless the client had obtained independent representation concerning the advisability of signing the retainer agreement.

The Montgomery County Bar Association offers binding arbitration to resolve fee disputes between clients and their attorneys.   The Bar Association will appoint a pro bono attorney to represent the client in the arbitration.   Both parties have to agree to participate in the arbitration; and the decision of the arbitrator(s) will be binding.

Legal malpractice can occur even when the attorney has successfully represented a client.   This occurred in Bijou v. Young-Battle 185 Md.App. 268 (2009).    Andrienne Young-Battle was bitten on the hand by a dog owned by Leila Bijou.  Young-Battle retained counsel and sued Young-Battle for $250,000.   The jury returned a verdict in the amount of $504,480, including $311,000 in loss earnings as a graphic designer.    At this point, Young-Battle’s attorney should have requested that the Court amend her $250,000 damage demand to conform with the $504,480 verdict.   But he didn’t.   The result was that the Court reduced the $504,480 judgment to $250,000.   The attorney’s malpractice cost the client $254,480. 

Queries:  Do you think that Young-Battle’s attorney was entitled to receive one-third of the reduced $250,000 verdict?   If Young-Battle’s attorney had malpractice insurance that covered the $254,480 in damages, was the attorney entitled to receive one-third of $504,480 as fees?

When a personal injury victim does not have health insurance, some medical providers will treat the victim as long as the victim and his or her attorney execute an “Assignment & Authorization”.  This document provides that the medical provider will be paid from the proceeds of the patient’s personal injury settlement or judgment.   If the patient does not receive a settlement or judgment, the patient is still responsible for his or her medical bills.

Both personal injury lawyers and physicians abuse “Assignments and Authorizations”.   If the client has health insurance coverage, the attorney should never refer the client to a physician who will only provide treatment pursuant to an “Assignment and Authorization”.    The reason why is that physicians bill patients without insurance double to triple the amount that they charge patients with insurance.   Even worse, most personal injury attorneys do not attempt to negoitiate a reduction of the medical provider’s excessive charges.    Such a failure on behalf of the personal injury attorney may constitute legal malpractice.

In personal injury cases, attorneys usually agree to represent the client in exchange for one-third (33.33%) of the gross recovery.  This is known as a contingency fee.    For the attorney’s contingency fee agreement to be enforceable, it must reasonable at the time the attorney was retained in relationship to the expected difficulty of the case.   In other words, it would be unreasonable for an attorney to charge a client in excess of one-third, unless there are extraordinary circumstances.    An excessive contingency fee  agreement is not enforceable. 

One Court explained why: “[A] fee agreement between lawyer and client is not an ordinary business contract.  The profession has both an obligation of public service and duties to clients which transcend ordinary business relationships and prohibit the lawyer from taking advantage of the client.  Thus, in fixing and collecting fees the profession must remember that it is a branch of the administration of justice and not a mere money getting trade”.   Matter of Swartz 686 P.2d 1236, 1243 (Ariz. 1984)

The reasonableness of the contingency fee must also be determined after the case is resolved.   For example, a one-third contingency fee may become unreasonable if the attorney spent  only a few dozen hours in obtaining a settlement.  In such situations, the attorney should voluntarily agree to reduce his or her fees so that the attorney does not receive an unwarranted windfall. 

In Maryland, a contingency fee agreement of 50% or more is both unethical and unenforceable, because an attorney is not allowed to have too great an interest in the client’s case.

If the attorney’s fee agreement is unenforceable due to excessiveness, the attorney is only allowed to recover the reasonable value of  the legal services rendered.   The reasonable value of the attorney’s services is usually substantially less than the contingency fee.

The Maryland Client Protection Fund reimburses clients whose retainer and/or property are stolen by an attorney.    A typical scenario is when a client pays an attorney to perform work; the attorney fails to perform the work; and the attorney also  refuses to refund the client’s retainer. 

A client should report the attorney’s malfeasance to the Maryland Client Protection Fund within 6-months of discovering the attorney’s defalcation.

The Maryland Attorney Grievance Commission investigates and disciplines attorneys who violate the Rules of Professional Conduct.   Common reasons why attorneys are disciplined include (a) lack of diligence; (b) incompetence: (c) failure to communicate with clients; (d) neglect; (e) failure to abide by client’s decision; (f) dishonesty; (g) criminal acts;  (h) misappropriation of client’s funds;  (i) commingling of client’s funds and (j) failure to disclose a conflict of interest.

The Attorney Grievance Commission can impose the following sanctions against a transgressing attorney: (a) warning; (b) public reprimand; (c) private reprimand; (d) suspension; and (e) disbarment.

Attorneys who commit malpractice share two common traits.  First, they fail to return telephone calls from their clients.   Secondly, attorneys who commit malpractice often have chaotic, disorganized offices.   The worst case I ever encountered was an attorney whose credenza had collasped under the weight of stacks of client files and the resulting avalanche of documents covered half of his office floor.

There is no requirement that an attorney in Maryland carry legal malpractice insurance.  In fact, about 20% of Maryland attorneys are uninsured.  That is why it is always appropriate to request that your prospective attorney provide you with proof of insurance.