To describe the 2011 year from the claims perspective one would have to use words like challenging, exigent, disappointing, and painful. It was a year that saw attorneys around the country being challenged by clients and non-clients for the professional services they rendered. A sign of the times, these individuals or companies were attempting to abate their own losses largely brought on by bad economic conditions. As might be expected in a tough economy, people often seek a deep pocket to try and recoup losses. Unfortunately, lawyers are near the top, if not at the top, of the deep-pocketed list. Interestingly enough, a recent Wall Street Journal article focuses on this very trend.
ALPS experienced what most in the lawyers’ professional liability industry seem to have experienced in 2011 – a tough year. This does not make the ramifications any easier to take. Litigation costs continue to rise from all different perspectives. In 2011, we saw more claimants rolling the dice against their lawyer when the alleged deviation from the standard of care was, to say the least, a reach. We also saw more instances where our policyholders sought coverage for a loss experienced while acting in their role as a business owner or shareholder, not in their role as an attorney for which ALPS insures them. Costs associated with challenges to what coverage our lawyers’ professional liability policy does or should provide were higher in 2011 than at any time in ALPS’ history. Again this was something most in the industry were experiencing, but nonetheless, expensive and unpleasant. We saw all of our jurisdictions affected proportionately with no one standing out as more troubling than the others. Likewise, claims were spread across all areas of practice with no surprises there either.
So the inevitable question is what could we have done in 2011 to make it a better year? Unfortunately the answer is very little. Most of the reasons ALPS saw more claims are the same reasons the industry as a whole saw more claims. The floundering economy, the increase in litigation, a perceived blurring of the lines on what lawyers’ professional liability insurance should cover. The only ways ALPS can affect claims in the coming year is to continue to appropriately assess risk and price premium responsibly. ALPS also provides education not just to our own policyholders but to the legal community as a whole on risk avoidance and how to run a successful and safe practice. And of course, as ALPS claims attorneys, we will continue to handle all claims professionally. But when all is said and done, 2011 was simply an expensive year in claims.