Increasing number of real estate malpractice insurance claims is testimony to the fact that a significant number of investors were cheated during a real estate transaction.
The American Bar Association released its "Profile of Legal Malpractice Claims: 2008-2011" data, which showed that real estate, personal injury plaintiff and family law top the chart in the legal malpractice claims list.
This is the first time a higher percentage of claims involving real estate have been reported. In all the previous surveys personal injury-plaintiff matters ranked first in generating lawyer malpractice claims, a press release issued by the American Bar Association stated.
"The ABA Standing Committee on Lawyers Professional Liability has provided a one-of-a-kind, detailed overview of legal malpractice claims," said ABA President Laurel Bellows in a statement. "The committee's report will give law firm risk managers, lawyers practicing in the field and legal malpractice insurers valuable insights into the areas of law, types of activity and other variables that give rise to malpractice claims."
The report said that "it is not surprising" that real estate and collection/bankruptcy have been the source of larger percentages of claims activity in the last several years."
According to the reports, 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.
The study showed that preparation, filing, and transmittal of documents generated maximum claims, “Advice moved up to become the second-most-likely reported activity to generate claims,” the report said.
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