Inadequate Investigation/Discovery Now the #1 Cause of Claims

The devil – as they say – is in the details.

And it’s the details that appear to be creating issues for lawyers when it comes to the principal underlying cause of LAWPRO claims.

Back in 1998, “inadequate discovery of fact or inadequate investigation” was the fifth most common cause of a claim when we looked at the top five reasons a claim was made against a lawyer.

Since then the claims cause of “inadequate investigation” has climbed steadily upwards to the number one spot: By 2011, this category of errors had more than doubled in frequency. Moreover, claims resulting from inadequate investigation or discovery of facts also increased proportionately in terms of all LAWPRO claims, rising to 15 per cent of errors reported from eight per cent.

Why this significant increase in this type of error? Perhaps it is a symptom of “BlackBerry legal advice:” Quick questions, and answers without context exchanged between people in a rush. These claims go to the very core of what lawyers are supposed to do for their clients – give legal advice – and basically involve the lawyer not taking extra time or thought to dig deeper and ask appropriate questions on the matter.

Claims arising out of the failure of a lawyer to properly investigate the facts also cost much more to defend and investigate. In fact, the cost of these claims has nearly tripled to just under $15 million in 2009 from just over $5 million in 1999.

And while it’s true that all claims costs have increased over that time, errors resulting from inadequate investigation have increased disproportionately when all LAWPRO claims are analyzed. Between 1999 and 2009, the proportion of claims costs attributable to inadequate investigation increased to 15 per cent of all LAWPRO claims costs in 2009 from about 10 per cent of claims costs in 1999.

LAWPRO has seen an increase in claims resulting from inadequate investigation of the facts in three particular areas of law: real estate, plaintiff litigation and wills & estates. For more detailed examination of this error in each of those areas of law, click here to read the full article Inadequate Investigation/Discovery Now the #1 Cause of Claims, from the August 2012 edition of LAWPRO Magazine

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Comments

  1. Dan,

    Putting aside the cases where the problem is the client wouldn’t pay but the lawyer didn’t adequately document the instructions:

    Unless one is lucky, the investigation won’t be adequate if one doesn’t understand the issues, and that means understanding the law.

    Understanding the law starts in law school: but wouldn’t that mean more courses in substantive law and fewer how conduct a profitable practice?

    Or having access to somebody who knows the law and being prepared (lawyer or client) to pay for that. But see John Sullivan’s coincidental post, today, where he asks for reasons why a lawyer might choose not to seek more qualified assistance.

    I’m curious: does your data allow you go see whether there’s been a significant increase in payment on litigation related e&o where the underlying action had less than a probable chance of success, but the insurer decided to settle because of the risk? The effect of the lawyer’s error, as you know, is often to move the cost of the risk of failure from client to lawyer.

    Cheers,