Risk Update

Risk News — NCAA Conflict Called, Law Firm Insurance & Malpractice Trends

Posted Dan Bressler

“NCAA Wants Firm Removed From Race Bias Suit Over Conflict” —

  • “The NCAA urged an Indiana federal court to disqualify Fegan Scott LLC from a proposed discrimination class action, saying one of the firm’s lawyers simultaneously worked for the collegiate organization’s document-review vendor.”
  • “The NCAA said in a Monday filing that Ravi Sakthivel’s conduct ‘violates the duty of loyalty owed to clients’ and poses a ‘substantial risk’ that factual confidential information from a client could be used by an adversary.”
  • “The lawsuit by former collegiate basketball player Troyce Manassa alleged the NCAA’s Academic Performance Program discriminates against student-athletes at historically Black colleges and universities.”
  • “Fegan Scott hired Sakthivel as a full-time attorney in September 2020, two months before Manassa’s lawsuit, the NCAA said. Sakthivel’s work as a document review attorney on the Manassa case began March 2 this year, when he was hired by the NCAA’s e-discovery vendor, Proteus, according to the NCAA.”
  • “The collegiate organization said it found out in late April that Sakthivel was also employed by Fegan Scott. The NCAA wrote to Elizabeth Fegan, the plaintiff’s lead co-counsel, to deliver the news on April 26. And in a response the same day, Elizabeth Fegan said Sakthivel had been placed on administrative leave.”
  • “In a May 2 letter to NCAA counsel Brian Casey, Elizabeth Fegan said she ‘unequivocally’ condemned Sakthivel’s actions. ‘To that end, I personally filed an attorney misconduct complaint regarding Ravi’s actions with the State Bar of California on April 27, 2022, and terminated his employment,’ Fegan said in the letter to Casey, included in the NCAA’s filing.”
  • “When he applied with Proteus, Sakthivel removed all references to Fegan Scott in his materials and said he was actually with another firm at the time, the NCAA said. He also attested in writing that he had no conflict of interest before starting work, according to the NCAA.”

“Insurance Defense Counsel a New Target of Legal Malpractice Claims” —

  • “The size of payouts for legal malpractice claims reached an all-time high last year, and for the first time some of those claims were made by insurers against the defense attorneys they hire to represent their insureds, according to a new report [PDF here] by the Ames & Gough brokerage.”
  • “The growing claim severity in the legal professional liability line continues a years-long trend, but malpractice claims made by insurers against their own counsel are something new. Ames & Gough found no concern about claims in the insurance defense area of practice in its annual survey of insurers from 2010 to 2020, but found that 18% of responding insurers reported claims against defense counsel in 2021.”
  • “Ames & Gough said it surveyed 11 legal liability insurance companies that together insure 80% percent of the top 100 law firms. It found that 10 of those insurers participated in a claim payout that topped $50 million in the past two years, three paid a claim between $150 million to $300,000 million and four paid a claim of over $300 million.”
  • “The experience of the insurers surveyed only tells part of the story, Garczynski said. ‘Anecdotally, we know of five claims that settled north of nine figures, including one over $400 million.'”
  • “Conflict-of-interest complaints remained the leading cause of malpractice claims, with seven of the 11 carriers surveyed ranking such errors as the first or second most common cause of claims. Clerical errors ranked first or second by four insurers.”
  • “Garczynski said remote work assignments may be one source of errors. She said young attorneys working from home are not getting direct supervision and miss out on regular communication with more experienced lawyers.”
  • “The bulk of the legal malpractice claims stem for three practice areas: 73% of insurers reported claims in the area of trust and estates, 63% reported claims in the area of business transactions and 45% reported claims from the corporate and securities field. Taxation came in fourth, with 27% of insurers reporting claims in that area.”