10 Tips for Managing Risk in Litigation

Clients sue their lawyers for a variety of reasons, not limited to cases where the lawyer has made an actual error. In a family litigation-based practice, there are a few common scenarios that increase the odds that a client will be dissatisfied with the results and seek to place the blame on legal counsel. While the list that follows is drawn from common claims against family law practitioners, it contains a number of useful lessons for litigators in general.

1. Emotionally invested clients

Clients who are emotionally invested in the issues under litigation are more likely to be dissatisfied with the results achieved by their counsel, regardless whether or not a win was achieved. Being alert to your client’s degree of emotional involvement in the matter and taking proactive steps to help your client resolve or otherwise deal with those issues may help to prevent or avoid claims made by unhappy, blame-shifting clients.

2. Failure to undertake adequate or appropriate pre-trial processes and investigations

Complex legal and factual issues demand that lawyers are thorough and diligent in requesting and obtaining financial information, in undertaking discovery processes and protecting a client’s assets and position. Always ensure you have taken all necessary steps to gather evidence within the scope of your client’s budget and your instructions are clear if your client has declined to follow your advice in this regard.

3. Client’s perception that settlement is inadequate 

This is related to the first point. Where there is emotional investment in the issues and the outcomes, achieving a settlement that the client perceives as satisfactory, especially with the benefit of hindsight, is particularly difficult. For this reason, settlement discussions with your client should be thoroughly documented, and instructions obtained or confirmed in writing.

4. Failure to retain necessary experts 

This is a strategic decision but may include budgetary considerations. If expert evidence is needed to make your case, make sure that you have fully discussed this with your client and have clear and well-documented instructions as to whether or not to retain any experts required.

5. Fee disputes

Fee disputes are frequently a precursor to a malpractice claim. Get the terms of your retainer in writing. Bill regularly so there are no surprises when the file closes. Keep the lines of communication open with your client on fee issues. And think twice before suing for unpaid fees, as a malpractice claim is frequently filed as a counter-claim.

6. Client confusion regarding fee-shifting issues

In domestic files in particular, the parties may have reached agreement as to who is responsible for payment of legal fees and/or disbursements. In any file, such agreements need to be clearly documented so as to avoid confusion about who is responsible to pay what. Essentially, this is a communications issue and therefore, easily avoided.

7. Withdrawal of services

This is an issue that arises where it may be unclear when the retainer ends or where a lawyer seeks to withdraw because of some conduct of the client, or a client’s failure to meet obligations under the retainer agreement. To avoid this scenario, scope of services to be provided should be clearly set out in a written retainer agreement. Withdrawal of counsel in the course of litigation is subject to provisions of the applicable Professional Code of Conduct, as well as the direction of the Court, in many cases. While there are circumstances where it will be necessary to withdraw services, where possible, other options should be considered.

8. Failure to properly draft prenuptial, separation and other key agreements

Malpractice claims based on poorly drafted agreements can occur in any area of practice. These may be the result of a lack of knowledge of the subject area, over-reliance on precedents, poor editing or any number of factors. These are claims based upon errors made by lawyers or their staff and stress the need for a diligent approach to document preparation and review.

 9. Multi-jurisdictional issues/choice of law

As clients and legal practices become increasingly mobile, jurisdictional issues become more common. If you’re exercising your mobility rights within Canada, ensure that you are aware of the relevant law and procedure in any jurisdiction where you don’t normally practice. Consider seeking the assistance and advice of a local agent. If the parties to your transaction or claim are in different provinces or countries, ensure that you’ve addressed your mind to issues of jurisdiction and choice of law whether in terms of determining where to bring a claim or enforce a judgment or settle a dispute should it arise in the future.

10. Poor communication

Many of the risk factors noted above relate in some way to this one. Poor communication is one of the most frequent bases for complaints to law societies about lawyer conduct, and similarly, is frequently the root cause for malpractice claims. Though most lawyers view themselves as skilled communicators, clients often disagree. Communication issues can include failure to respond to emails or phone messages, failing to properly explain legal terms and opinions and failing to document (and follow) client instructions.

(Adapted from the article, Malpractice Avoidance – Some Friendly Reminders originally published in the Summer 2012 issue of Loss Prevention Bulletin (Canadian Lawyers Insurance Association))

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