How Attorneys Can Be Liable to Third Parties

Posted on: April 11, 2019 by Huntersure

Lawyers operate with the risk of being hit with malpractice or negligence claims; it’s just the nature of their job. But while lawyers generally think their only liability risk comes from making mistakes in their representation of clients, they do run the risk of being liable for third parties.

It’s becoming more and more of an issue among law professionals when it comes to facing third-party liability claims in aiding their clients in a venture that is looked at as mounting to a breach of fiduciary duty. This is known as civil aiding and abetting and civil conspiracy. Here’s a better look at this kind of claim as well as the attorney liability insurance that can cover this issue.

What Are Third-Party Claims?

Aiding and abetting and conspiracy claims are born out of criminal law. They lead to liability for attorneys who help their clients to commit some kind of crime against a third party. This usually involves a lawyer helping their client commit fraud or some type of financial crime against a third party. When a lawyer focuses on their client’s needs without forecasting how it could affect another party, this is setting the lawyer up for a claim of their own.

Lawyers have two different ways in which they can be hit with this kind of claim, as mentioned above. First, there is the claim that they aided in committing fraud on a third party. Secondly, lawyers can have a claim filed against them when they aided in or even created the situation in which the client breached a fiduciary duty to another person.

Attorney Liability Insurance

Attorney liability insurance can help lawyers avoid hard-hitting liability claims that are not only financially draining but detrimental to their reputation. A variety of jurisdictions have common law protections for attorneys that can protect lawyers from aiding and abetting claims. These cases highlight that attorneys are meant to perform their legal services as honestly as possible for their clients and they are kept safe as a matter of public policy.

This kind of protection was created to help attorneys with the benefit of the doubt. The idea is that if attorneys are stressed about having claims brought against them for representing their clients, then they cannot be effective advisors of the law.

But outside of common law protections, lawyers have the opportunity to invest in attorney liability insurance that acts as a safeguard for attorneys so that their financials are kept safe as well as their reputation. Attorney liability insurance provides lawyers with the right coverage to combat claims and help them through litigation. Third-party claims can rattle on for a significant amount of time, which means that having this kind of protection will help to keep operations moving for a legal professional.

About Huntersure

At Huntersure, we specialize in providing quality professional liability solutions to accounting professionals. Our Accountant Liability Insurance program provides coverage for accountants, auditors, bookkeepers, and tax preparers, so no matter where your clients lie in the industry they can have the coverage they need to protect themselves and their assets. To learn more about our operation and our Professional Liability Insurance solutions, contact us today at (855) 585-6255.

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