Legal Malpractice Claims On The Rise — Study

 Friday, May 22, 2020

 Insurance Business

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.

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.