Update: On 10/18/13, a jury found Walker and his firm not guilty of malpractice. The jury awarded the city of Clinton no award. Notwithstanding the verdict, the risk management issues remain the same – a firm should be experts or else engage the assistance of experts in all work product. Even with this victory, the firm has the potential costs of their spent insurance deductible and potential reputational harm from negative press in the news. Original Post below:
A Des Moines, Iowa law firm has been sued for work related to False Claims Act defense one of its lawyer performed for the city of Clinton, Iowa.
Michael Walker of the law firm Hopkins and Huebner was engaged by the city of Clinton in 2009 after a whistleblower alerted the government that the city was allegedly filing false medicare claims to increase reimbursements. Walker took the case and it was settled shortly thereafter in 2010. The city agreed to pay $4.5M for the fraud.
The city then retained another lawyer who has expertise in the False Claims Act to investigate the actions of Walker. This lawyer determined – and has testified – that the Walker committed malpractice in this case because of his inexperience and lack of knowledge of the False Claims Act. According to the prosecution, Walker committed malpractice when he agreed to take the case and points out that Walker himself has testified that he never even heard of the Act prior to being engaged by the city. The second act of malpractice was in not filing for dismissal based on various rules in the Act that could have led to either a dismissal or lower settlement payout by the city.
The city has sued Walker and his law firm for $4.67M
Risk Management Takeaways
While this case has yet to be settled, it points to an important aspect of law firm risk management that should be noted. The very definition of malpractice and professional liability lawsuits encompass the idea that the lawyer was not able to fulfill their services as prescribed by law or as an expert would be expected to act. When entering a new engagement, lawyers and firms should be quick to determine whether the scope of the work is within the firm’s expertise, or it it lies outside their ability. Taking a client on who needs work beyond what the firm is capable of can lead to lawsuits – as the Iowa firm has discovered.
If the engagement stretched the firm’s knowledge base, bringing in a co-counsel, hiring an expert or even turning down the case are best practices. These will mitigate the likelihood of mistakes and therefore mitigate the likelihood of lawyers malpractice lawsuits stemming from errors or omissions in the work product. Contact us to discuss more ways to protect your firm.