Due to the type of work they do, lawyers are always in danger of being sued for malpractice or carelessness. Although most lawyers believe that the only way they can be held liable is if they make mistakes when representing clients, they also run the possibility of being held accountable to third parties.
The problem of defending yourself against third-party liability claims when supporting clients in an endeavor that may eventually be viewed as a violation of fiduciary responsibility is one that attorneys are encountering often. Civil conspiracy, aiding, and abetting are terms used to describe this. Here’s a closer look at this specific claim called third-party liability claim and the lawyer liability insurance that can help with it.
Third-party claims – What are they?
Criminal law is the foundation for allegations of conspiracy and aiding and abetting. They put lawyers who assist their clients in committing crimes against third parties at risk of legal repercussions. This typically entails a lawyer assisting their client in defrauding a third party or committing some other financial crime. A lawyer is putting themselves in a position to make a claim when they concentrate on their client’s demands without considering how they might affect another party.
As previously indicated, there are two ways in which lawyers may be subjected to this type of claim. The first allegation is that they helped perpetrate fraud on a third party. Second, attorneys may face a lawsuit brought against them if they helped in creating a circumstance where the client violated the fiduciary duty of someone else.
Can attorney liability insurance help?
Lawyers can prevent financially crippling and reputation-damaging hard-hitting liability claims by purchasing attorney liability insurance. Common law defenses against accusations of assisting and abetting are available to lawyers in several jurisdictions. These instances serve as a reminder that lawyers have a duty to represent their clients honestly and that it is public policy to keep them secure.
Attorneys with the ‘benefit of the doubt’ are intended to profit from this type of protection. The theory is that lawyers cannot effectively advise clients on the law if they are anxious about being sued for the work they did on their behalf.
In addition to the protections provided by common law, lawyers can also choose to purchase legal liability insurance, which serves as a buffer between them and their clients, protecting both their finances and their reputation. Attorney liability insurance gives attorneys the necessary protection to fend off lawsuits and support them during the legal process.
