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August 2016

July 2016

When Lawyers Mess Up: Current Malpractice Trends

Shutterstock_176282705According to the American Bar Association (ABA) Standing Committee on Lawyers’ Professional Liability, between 2008 and 2011 the top areas of practice generating malpractice lawsuits were, in order of frequency:

  • Real estate
  • Personal injury
  • Family law
  • Estate, trust, and probate law
  • Collection and bankruptcy

This may be seen as a deviation from a longstanding trend in which lawyers who practiced personal injury law were the most likely to generate the most malpractice suits filed against them on an annual basis. The findings may be due to data limitations and the fact that the analysis is not adjusted for the number of total practitioners in each practice area, the committee cautioned.

New Exposure Areas Faced by Firms

Continued fallout from the financial crisis and the growing complexity of electronic discovery are just two of the new areas of exposure to liability for law firms. But an increase in legal malpractice litigation may be a sign that major law firms are willing to stand their ground rather than bow out early through face-saving settlement agreements.

There appears to be a growing trend that attorneys are now less likely to settle claims early on, before a claim is filed that could potentially stigmatize the firm.  According to a Law 360 report, there has been a rapid rise in the media coverage of suits against law firms and attorneys, and it is becoming clearer and clearer to firms that malpractice suits do not necessarily result in a tarnished reputation.

The ABA’s Standing Committee on Professional Liability is planning to issue its next edition examining the profiles of legal malpractice claims in September 2016. For more information about legal malpractice trends and how to protect your practice, contact USI Affinity today.

What Happens to Student Loans upon Death

Shutterstock_172081169Outliving a child is every parent’s worst nightmare. Imagine the grief of not only losing a child, but to violence, as was the case for this New Jersey mother. Unfortunately, her grief is now compounded by the additional financial and emotional strain of being forced to pay off her son’s student loans. It is, fortunately, an uncommon situation, but it does happen.

While there are some provisions for federal loans to be discharged in the event of death, state programs and private lenders are not always so compassionate. At a time when students and families are excited about the prospect of living out the American educational dream, death is the last thing on anyone’s mind. Many parents and other family members co-sign on loans without a moment’s notice of what would lie ahead financially should the worst happen to their student.

For those who understand the value of life insurance, typically a life event such as marriage, birth of a child or purchase of a house triggers an application for coverage. However, receiving student loans is another circumstance that should be seriously considered as a trigger event for looking into life insurance coverage.

Most young people (and oftentimes, their parents) over-estimate the cost of coverage. In addition, the process is shrouded in mystery and there are many places to look for coverage. It can be an intimidating process to start. One often-neglected source is through an association affiliation (e.g. alumni or professional associations). Because these association programs are typically group coverage, they can offer better rates and easier underwriting processes than an individual can get on their own – and the insurance company usually cannot raise rates for an individual alone.

When co-signing on a loan, families should consider if it makes sense to carry life insurance coverage on their student. Because of their young age and generally good health, coverage is much easier to secure at a lesser cost. Should the worst happen to the student, the family can choose to use the insurance payout to cover the cost of any loans that cannot be discharged, allowing them to grieve properly without the added financial distress.