Rising legal malpractice claims are hitting US law firms hard, with lawyers professional liability insurers seeing greater frequency and severity of claims, according to a new study by insurance broker Ames & Gough.LitigationLiability
In its 10th annual survey of lawyers professional liability claims, the broker polled 10 leading lawyers professional liability insurers, which, on a combined basis, provide insurance to about 80% of AmLaw 100 firms.
Ames & Gough found that the number of claims resulting in large multimillion-dollar payouts as well as the dollar amounts involved spiked for the second straight year.
Most of the insurers surveyed had made a claim payout of more than $150 million in the past two years, and at least two settlements exceeded $250 million.
“Yet, according to the survey, the actual large-claims experience may be worse than reported; due to the increased cost to defend claims, a number of matters settled quickly (to avoid the added expense) with the resulting claims above their primary layer of insurance,” Ames & Gough said.