Legal Malpractice Claims Low for Oklahoma Real Estate Attorneys
Price, Marie, THE JOURNAL RECORD
Real estate-related legal malpractice claims are up about 4 percentage points nationally, but Oklahoma isn't experiencing that kind of jump, says an official with Oklahoma Attorneys Mutual Insurance Co.
The state did see an increase in such claims during the economic downturn of the 1980s, said company President Phil Fraim.
When property values plummet faster than lawyers and others can do the foreclosure work, he said, people may try to hold their attorneys responsible for dragging things out, resulting in a further diminution in the value of their houses.
"We're fortunate, so far," he said. "Housing values, real estate prices as a whole, really haven't dropped dramatically."
As Fraim noted, claims tend to rise during economic slides.
Fraim said there is a fairly lengthy tail or lag time in professional liability claims, between the time the work takes place and when the act or omission is turned in as a claim.
"If we are in fact entering into a more down economic time, some of that would depend on how long that time period is," he said. "If it does cause claims, we probably wouldn't expect to see them for a little while. We haven't at this point noticed too much difference."
Fraim said Oklahoma's claim frequency is low compared to the nation as a whole, at about 2 percent, or two claims per 100 insured lawyers.
"That still hasn't moved much," he said. "We've seen a slight increase, but when you're at such a low level, there's really only one way for those to move, realistically."
The American Bar Association released a new study this week showing a rise in malpractice claims in real estate transactions, alleging conflicts of interest, closing errors, and issues relating to contract drafting, zoning and escrow accounts, among others.
Claims arising in real estate practice accounted for 20.05 percent of all claims during the study period, trailing only personal injury-plaintiff cases, at 21.56 percent.
In the 2004-2007 study, the ABA reported that personal injury- defendant claims fell 7. …