anatomy of a malpractice lawsuit presented by: gary h. barnes, esq. gary h. barnes, professional...
TRANSCRIPT
Anatomy of a Malpractice LawsuitAnatomy of a Malpractice Lawsuit
Presented by: Gary H. Barnes, Esq.
Gary H. Barnes, Professional AssociationBurlington, VT N. Venice, FL
Insurance Coverage Counsel ● Accounting Firm Counsel
Neutral Arbitration and Mediation Services
Copyright 2011, Gary H. Barnes, P.A. All Rights Reserved.
IntroductionIntroduction
What does a lawsuit mean?
– Time
– Money
– Lost Opportunity
– Publicity
– Reputation
– Morale
Introduction (cont.’d)Introduction (cont.’d)
Most Important, a lawsuit is a process that determines whether the government will require wealth-shifting from the Defendants to the Plaintiff
Introduction: Litigation OutcomesIntroduction: Litigation Outcomes
Worst Outcome
Better Outcome
Best Outcome
IntroductionIntroduction
Who can sue?
IntroductionIntroduction
Who Gets Sued?
The Conventional View vs. Reality
(good accountants and bad accountants)
Where it all beginsWhere it all begins
Client Acceptance Documentation of Expectations Self-Preservation 101: Put Your Job In
Writing Self-Preservation 102: Put Your Clients’
Job In Writing
What To Do When You Discover Your Own MistakeWhat To Do When You Discover Your Own Mistake
The dangers of informing the client The dangers of investigating – the “self-
evaluative privilege” vs. creating evidence to be used against you.
Attorney-client privilege Attorney work product privilege
POLLING QUESTION 1POLLING QUESTION 1
If you are threatened with a lawsuit you should investigate the complaint and get a written assessment of the claim's validity, true or false?
The Demand Letter: What To DoThe Demand Letter: What To Do
When to Contact Your InsurerWho should reply?Retention of defense counselRetention of insurance coverage counsel
The Complaint and Service of ProcessThe Complaint and Service of Process
What the complaint means Publicity / Public Record Contrast with Arbitration
Selection of Defense CounselSelection of Defense Counsel
Policyholder input on selection of defense counsel
Who is on your insurers “panel” of defense counsel
Your right to retain separate and independent defense counsel, at your expense
Experience MattersExperience Matters
What is your [insurer-provided] defense counsel’s experience with AICPA Professional Standards?
What is your defense counsel’s actual trial experience?
Selection of Consulting ExpertSelection of Consulting Expert
“consulting expert” vs. “testifying expert” The role of the consulting expert
(Cheerleaders need not apply) Written vs. oral reports
Defense Counsel’s Initial ReportDefense Counsel’s Initial Report
Statement of facts: how accurate and thorough?
How clearly written? Settlement position? Risks of going forward with trial How the insurer uses defense counsel’s
initial report [reserves]. Is Defense Counsel trying to obfuscate?
The Potential for Disputes With Your Insurance CompanyThe Potential for Disputes With Your Insurance Company
Duty To Defend and Reservations of Rights
Jurisdiction: Why Am I Being Sued in Oshkosh?Jurisdiction: Why Am I Being Sued in Oshkosh?
In Personam Jurisdiction: sufficient minimum contacts or personal jurisdiction
Examples: client in foreign state, web pages, preparation of tax returns (state), preparation of K-1
Impact of a forum selection clause in the engagement letter
Removal To Federal CourtRemoval To Federal Court
Advantages of removal to federal court
– Jury pool
– Caliber of judges and law clerks
– Caliber of appellate courts
– Different rules of evidence
– Different Rules of Civil Procedure
– Drawbacks of removal
But the Plaintiff Was Never my Client! But the Plaintiff Was Never my Client!
Liability to non-client third parties Minimizing Exposure to Non-Clients Adopting and enforcing rules concerning staff
contact with third parties, even if client consents
Importance of engagement letter with known third-party user of accountant work product – define User’s responsibilities
POLLING QUESTION 2POLLING QUESTION 2
You can be sued in a state where you do not maintain an office, if you regularly contact clients in that state using the telephone, e-mail, and overnight courier services, true or false?
Preparing the Answer / Motion to DismissPreparing the Answer / Motion to Dismiss
Role of the Defendant; gathering documents and identifying witnesses
Role of the Defense Counsel, develop a strategy, develop a theme, execute the plan.
Case Management By The CourtCase Management By The Court
Deadlines and ready for trial date Deadlines for motions to dismiss,
changes in pleadings, completion of discovery, motions for summary judgment, submission of pre-trial paperwork, calendaring of trial dates, mandatory dispute settlement talks.
Discovery: the Agony and The Ecstasy Discovery: the Agony and The Ecstasy
Disclosures Interrogatories Requests To Produce Requests To Admit Depositions
Dispositive MotionsDispositive Motions
How Cases Get Thrown Out of Court Why Cases Don’t Get Thrown Out of
Court
Gut Check: How and Why Attorney Fees ClimbGut Check: How and Why Attorney Fees Climb
Expenses to this point Who pays? Recovery of Attorney Fees The Effect of Self- Liquidating Policy
POLLING QUESTION 3POLLING QUESTION 3 True or false, your insurance policy may
reduce the amount of your coverage by the amount of defense expenses, including attorney and expert fees?
Mediation: What It’s All AboutMediation: What It’s All About
Why Mediation? Setting Goals For Mediation Who Is the Mediator? Can you “win” in Mediation? Is the Mediator Your Friend? Who decides whether to settle?
TrialTrial
Jury Selection/ General Instructions Opening Statements Examination of Witnesses Presentation of Documents/ Use of
Courtroom Technology The Importance of Theme
Trial (continued)Trial (continued)
What Life Is Like During Trial Trial to the Bench Jury Instructions The Verdict Post Trial Motions
AppealAppeal
How The Appeals Process Differs Post Trial Mediation The Record on Appeal Briefs Oral Argument The Decision: Permanent Publicity
Coverage DisputesCoverage Disputes
When coverage disputes may become litigation Insurer’s right to seek reimbursement for excess
coverage provided. Against whom may the insurer seek to recoup its
losses? May subrogation be sought by the insurer against an
insured under any circumstances (example, if a partner engages in fraudulent activity)
What are the Policyholder’s duties in the event of subrogation?
Recap: To Achieve GoalsRecap: To Achieve Goals
Present a Narrow Profile
– Selectivity in clients, engagements, asset protection
Document Creation and Destruction Policies
Maintain Your Insurance
– Know your duties, your right to competent counsel
RecapRecap
Plan how and where
– Venue clause, arbitration clause Use Mediation Wisely Understand your exposure and take an
appropriate role in settlement negotiations.
Keep your eye on morale, reputation issues
Questions?Questions?
Key features of arbitration Consider retaining public relations
experts Remember impact on staff morale Have everyone prepared with “elevator
line” Prune your client list annually
Extra Credit AreasExtra Credit Areas
Bankruptcy BasicsBankruptcy Basics
How adversary proceedings in bankruptcy compare/contrast with civil litigation
The dual roles of a bankruptcy judge
Jury trial?
Asset Protection BasicsAsset Protection Basics
Adequate insurance Current estate planning Minimal assets in the name of the
accounting professional Practice organized as a professional
Corporation (in good standing) All retirement funds in “qualified”
retirement plans