Real Estate-Related Legal Malpractice Claims Are Most Common, ABA Study Finds

The American Bar Association (ABA) reported last week that real estate-related claims are now the most frequently filed among legal malpractice claims. Personal injury and family law claims came in second and third.

The report, “Profile of Legal Malpractice Claims: 2008-2011,” is the first since the original study in 1985 that did not name personal injury as the prominent reason for legal malpractice. 

Real Estate Legal Malpractice“The authors believe that failed real estate (and other business) transactions likely were the source of increased claims in the 2011 Study, but it would be a leap to state that is definitively so based on the data,” as relayed in the ABA press release.

The most common attorney errors leading to the reported real estate-related claims were in “preparation, filing, and transmittal of documents,” according to the release. “Advice” was second on the list.

There are various categories of attorney malpractice, including negligence, breach of contract, breach of fiduciary duty, and legal malpractice in a trial. (Read details about these categories in Types of Attorney Malpractice.) In the cases of real estate legal malpractice, negligence comes into play. Attorneys are held to a certain standard of service, if an attorney is representing the interests of a client, their service falls below this standard, and the client suffers as a result, that attorney can be found to have been negligent, and be sued for malpractice.  

If a legal malpractice claim turns into a lawsuit, a plaintiff would have to prove that the attorney was negligent; that had a different lawyer handled the transaction, the outcome would have been different; and that damage was sustained as a direct result of the attorney’s careless or intentional actions. 

The ABA reports only claims made to insurance companies and not cases of legal malpractice having gone through litigation; and the study cautions that it relies on self-reporting from malpractice insurers and “is not a comprehensive review of all malpractice claims against all lawyers and should not be used by underwriters to determine high- and low-risk practices." 

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