Lawyers Mutual Insurance of Kentucky
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We fight for the fighters.

Legal Malpractice in Kentucky: A 1996 Statistical Review of Kentucky Malpractice
Download 1997_newsletter_spring.pdf

The Risk Manager, Spring 1997

By Del O’Roark, Risk Management Consultant for Lawyers Mutual

One of the reasons for founding Lawyers Mutual was to get a handle on the scope and characteristics of malpractice claims in Kentucky. The idea was that Kentucky lawyers should pay premiums for insurance based on what is happening in Kentucky, not in other jurisdictions. Lawyers Mutual now has nearly 10 years of claims experience and a new national study of legal malpractice was recently published. Accordingly, this seems like a good time to provide you with a short status report on legal malpractice in Kentucky and how we stack up.

Background
In 1986 the ABA issued a comprehensive study of legal malpractice that was the definitive source on legal malpractice in the US until the 1996 ABA-NABRICO National Legal Malpractice Data Study. The National Association of Bar-Related Insurance Companies and the ABA joined forces to produce the 1996 study designed to build on the 1986 study. Lawyers Mutual, as a member of NABRICO, participated in this study. In this newsletter we share with you highlights of the ‘96 study and provide analysis for your own evaluation of where we are in Kentucky. In reviewing this information consider the following factors which necessitate that a certain amount of Kentucky windage be applied before drawing conclusions:

  • The ‘96 study is based primarily on bar-related insurance company data. Bar-related companies typically do not insure large firms. This study is most relevant to solo practitioners and small firms as is Lawyers Mutual’s data.
  • Differences in data collection methodology and regional differences make comparisons useful only on a broad gauge basis. National studies are primarily helpful in spotting malpractice trends and reviewing your practice’s risk management program. While significant differences between Kentucky data and national data require examination for the reasons why, these differences may have benign causes.
  • Study results are based on claims reported to insurance companies by insured lawyers. They do not capture malpractice not reported or that of uninsured lawyers (estimated to be more than 30% of all lawyers in the ‘96 study). Neither do these claims reports provide the information needed to determine what percentage of lawyer time is spent on each practice area. For this reason an active practice area with a high percentage of total malpractice claims may appear more risky than it actually is.

Top Ten Malpractice Claims by Area of Practice

  • Real Estate practice remains a high risk area in second place in all three studies. It is disappointing to see Kentucky at a higher percentage than the ‘96 study. The primary cause for real estate claims remains the same -- missed encumbrances.
  • Collection and Bankruptcy has been visible as a growing source of malpractice claims in Kentucky for some time. This trend developed in Kentucky during a time when national statistics show improvement. What’s going on here?
  • Worker’s Compensation claims have been increasing in Kentucky for some time and are conspicuously higher than either the ‘86 or ‘96 study. Maybe the recent overhaul of Kentucky’s workers compensation law will reverse this trend.
  • Family Law is a growing source of malpractice claims. While Kentucky’s percentage compares favorably with the ‘96 study, it is a practice area of increasing risk. Divorce and elder law matters appear to be the hot spots. It has been estimated that lawyers with less than five years experience account for about 30% of these claims.
  • Business Transactions practice showed a dramatic increase in malpractice claims in the ‘96 study. Much of this is probably attributable to the economic situation of the early ‘90’s. Nonetheless, this is an area to watch. New laws and regulations continue to make already complex business transactions even more complicated. You must keep up.

Top Ten Malpractice Claims by Area of Practice

  ABA'86 NABRICO'96 KY'97
Personal Injury-Plaintiff 25.08% 21.65% 19%
Real Estate 23.29% 14.35% 17%
Business Transactions 3.04% 10.66% *
Family Law 7.88% 9.13% 8%
Corp./Bus. Organization 5.32% 8.87% * 5%
Collection & Bankruptcy 10.49% 7.91% 10%
Estate, Tax and Probate 6.97% 7.59% 7%
Criminal 3.34% 3.82% 5%
Workers' Compensation 2.14% 3.30% 8%
Personal Injury-Defense 3.22% 3.27% 3%
* Lawyers Mutual merges these two categories

Lawyers Mutual of Kentucky

10503 Timberwood Cir., Ste. 213
Louisville, Kentucky 40223

Phone: 502-568-6100
Fax: 502-568-6103

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Lawyers Mutual of Kentucky

10503 Timberwood Cir., Ste. 213
Louisville, Kentucky 40223

Phone: 502-568-6100
Fax: 502-568-6103

Who We Are
About Us
Staff
Board of Directors

What We Do
Risk Mitigation
Professional Liability Policy
Court Bonds
FAQs

Applications
Quick Quote
Application
New Bar Admit

Applications
Quick Quote
Application
New Bar Admit

Forms
Bar Complaint
Claims Reporting
Make a Payment
Add an Attorney
Remove an Attorney
Firm Name Change
Firm Address Change

Resources
Subjects A-Z
Schedule an Ethics CLE
Practice Management

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Disclaimer: The contents of this Web site are intended for general information purposes only and should not be construed as legal advice or legal opinion on any specific facts or circumstances. It is not the intent of this Web site to establish an attorney’s standard of due care for a particular situation. Rather, it is our intent to advise our policyholders to act in a manner which may be well above the standard of due care in order to avoid claims having merit, as well as those without merit. In the event any statement on the Web site differs from a statement in an issued policy the policy will control.

  • Who We Are
    • About Us
    • Staff
    • Board of Directors
  • What We Do
    • Risk Mitigation
    • Professional Liability Policy
    • Court Bonds
    • FAQs
  • Applications
    • Quick Quote
    • Application
    • New Bar Admit
    • Apply by Postal Mail
  • Forms
    • Claims Reporting
    • Policy Changes
      • Adding an Attorney
      • Remove an Attorney
      • Firm Name Change
      • Firm Address Change
    • Make a Payment
    • Future Contact Request
    • Reporting a Bar Complaint
  • Media
    • Newsletter Archive
    • COVID-19
    • Disaster Response Information
  • Resources
    • Site Search
    • Subjects A–Z
    • Subjects by Year
    • Schedule an Ethics CLE
    • OnDemand CLE Courses
    • Practice Management
    • Financial Statements
  • Contact