NU Online News Service, June 18, 3:35 p.m. EDT
A recent ruling by the New York Court of Appeals opens the door for estates to sue attorneys, which could ultimately result in an increase in professional liability insurance premiums, predicts an executive.
The decision written by Judge Theodore T. Jones Jr. reverses previous rulings that basically insulated estate attorneys from liability unless they acted in a fraudulent manner. Now, an executor can sue an attorney.
"Attorneys will need to look ahead and really think about how their actions will impact people they won't have a relationship with until their client dies," said Mark Bunim, chairman and managing director of Case Closure LLC, a mediation firm in New York.
With additional lawsuit threats could come additional insurance premiums, said Mr. Bunim.
"Insurance companies once sold malpractice insurance policies to New York law firms with no worries about this, but now they will have to worry about it," Mr. Bunim said. "It is a new exposure–a new risk. A whole new class has been given the right to sue."
Mr. Bunim said there are some unanswered questions from the decisions. The ruling states an executor, which is normally a family member, can file suit but it is not clear what will happen if an attorney is named executor of an estate. Being both the estate planner and executor could now cause a conflict of interest.
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