It is no fun having or talking about a malpractice lawsuit against a lawyer — or for that matter any suit against any professional. Such suits stand as a grave indictment on the profession.

Not only is it heart-wrenching for the lawyer concerned, it also hits us, innocent others, where it next hurts most — our pockets, as it impacts on the premiums we pay. Indeed, there can arise a malpractice insurance crisis if several bombshells of claims hit us as a profession — as it did to physicians in Virginia, USA, affecting, amongst others, expectant mothers.

Already, we saw several months ago a 25% increase in our standard premiums for the year 2000/2001. This has been on account of a strong increase in the number and quantum of claims. Over the last four years, the Law Society’s Compulsory Professional Indemnity Scheme’s loss ratio (claims/premiums) has deteriorated from 80% in 1996/1997 to 151% in 1999/2000.

In Malaysia, it is worse. In a New Straits Times report on 20 March 2000, several local insurance companies have refused to continue insuring lawyers, having noticed a drastic rise in the number of potential claims last year.

In the UK, although there was a drop in the number of claims or circumstances notified for the fourth year running, last year’s Annual Report of the Solicitors Indemnity Fund warned that the reintroduction of products (or client services) could lead to further claims. In April 2000, the Law Society’s Council in the United Kingdom gave the green light to allow law firms come this September to seek professional indemnity insurance in the open market with a managed general agency operating alongside individually approved insurers.

But whether we ought to free Singapore lawyers from our present compulsory Professional Indemnity Scheme begs the question; the consumer and the public need protection; serviceable relationships need to go that much further than a simple premium arrangement — the ramifications are great or can be grave!

More important is the question of whether we can arrest the tidal wave of claims.

Statistics provided by our brokers for the period April 1999 to March 2000 show 47 claims in conveyancing matters, followed by 30 claims from litigation matters, and 10 from commercial cases. At least 2 conveyancing claims have been paid, and 7 others were pending in Court as at 31st December 1999; 37 others are pending developments. Indeed, as we confront these more than perennial problems, it is not difficult to fathom reasons behind breaches of standards by lawyers (or other professionals) in malpractice claims. These ‘mistakes’ are frequently foolish, and often avoidable, and can arise from a whole host of reasons.

A breakdown in the lawyers’ administrative procedure or poor handing over procedures in the event of the turnover of staff may lead to delays, and time bars, with ‘unless orders’, albeit without intentional and contumelious conduct, or more shockingly, a file not attended to on account of a mental block of sorts.

Claims may also be attributable to a lawyer’s lack of knowledge in a particular area of the law or his failure to explain certain rules such as the ineligibility of a foreign purchaser to purchase property below six stories, not having condominium status, or the owner of a HDB flat not advised of restrictions in purchasing private property. In such cases, one can only hazard a guess that the lawyer has not kept abreast with the latest developments in his specialist areas or alternatively, was dabbling in an area beyond the bounds of his normal expertise or discipline. In some cases, mistakes may have even resulted from an unrealistic caseload shouldered by a firm or a particular solicitor or perhaps a junior solicitor without a mentor with more experience to guide him in handling a particular case of greater complexity.

The Law Society Counsellors Scheme, designed to give practitioners a means of seeking informal assistance from designated Senior Practitioners in selected areas of law, can go some way to reducing risks.

It is true that in everything that we do there is a risk, for the greatest risk is not taking one. Risk management is the key; but risk management does not mean risk avoidance. One must know the risk and, after careful thought, accept the risk. In order for that process to work, knowing where the risk lies, and how your competitors address the same risk or implementing systems and plans to avoid it, are crucial.

If indemnity insurance is the cure, then Continuing Professional Development (CPD) must or ought to be the prevention. In England, CPD has since November 1998 become mandatory for all solicitors. This is a benefit, not a burden, especially when a lack of knowledge of a relevant law is a constant source of claims. A little knowledge, as the saying goes, is indeed a dangerous thing.

Whether we should rap sternly the fingers of lawyers who are repeat offenders in negligence claims by asking them to go for classes or even consider Draconian measures such as suspending their practising certificates for a period, and make them go through a CPD course at their cost, and/or publicise such claims, the vigilance of the lawyer over a file remains his fundamental control — a causation in fact and a causation in law.

Support staff are undeniably hands-on in areas where their superiors work, and here, the Law Society can conduct courses for them, to prop up the quality of support services they can render. The Council of the Law Society’s approach in this area of development is a welcome sign.

Regular sharing and feedback by partners — an in-house staff meeting or training or ‘a law update’ at a staff meeting — can help reduce claims or eliminate errors. An open firm culture is an ideal medium — a stock check at periodic levels, a valuable stopgap.

And keeping in touch with changes in the law, procedures, and systems can provide the ultimate and requisite value-added service to the clients: to ignore this will be at our peril. Whether you are a non-conformist or a do-or-die maverick, without due care or due diligence, that dirty brief can be just around the next corner in the form of a client who takes you on.

Rather than lamenting ‘I knew from the outset that he was trouble’, adopting a timely business-vetting procedure now, can salvage you, and your practice, from sudden death or worse, a bloody shoot-out.

Palakrishnan
President
The Law Society of Singapore