Why are malpractice insurers concerned about case sharing case and client referrals?
Any time a law firm shares a case with another attorney or refers the case out to another firm, the original law firm continues to have exposure for this case. Numerous courts have allowed plaintiff attorneys to pursue attorney malpractice claims against all attorneys and law firms that have touched a case. The plaintiff attorney looks for any insurance coverage that might be related to the malpractice case.
When referring or sharing a case document the relationship with your client. Referred cases opens the referring law firm to malpractice claims from the referred client for something the other law firm did. Document the referral with the client through a written agreement that spells out the referral or case sharing arrangement. Even if the attorney is not taking a referral fee have your client signed a referral agreement stating that you are not representing the client in this matter, nor are you recommending the other attorney and you have no involvement in the case. Consult your local bar for the appropriate wording and forms for your jurisdiction.
If you are case sharing or referring cases to other attorneys at a very minimum require that the referring firm have attorney malpractice coverage with the limits and deductible that you are comfortable with given the referred matter. Get a copy of the declarations page showing limits, deductible and prior acts dates annually.
Better practice is getting annually a certificate of insurance showing your firm as a certificate holder on the referred to law firm’s malpractice insurance. The advantage of being a certificate holder is if the coverage is cancelled during the policy term, the certificate holder should be notified.
Don’t let your firm’s insurer be the ‘deep pockets’ for a claims settlement. It will cost you in the end.
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Lee Norcross, MBA, CPCU
Managing Director, CEO
(616) 940-1101 Ext. 7080