B. Does Your Attorney Have Insurance?
The second question you must answer is whether your attorney has legal malpractice insurance. If you interviewed your attorney properly, you already know the answer to this question.
Assuming there is coverage, two things will happen after you start your lawsuit. First, the insurance company will assign a law firm to defend your former attorney against your claim. This will be a firm with a great deal of experience in defending attorneys. Second, the insurance company will set aside (or "reserve") some amount of money to pay you if the law firm, your former attorney and the insurer are not successful in getting rid of your case. The amount set aside to pay you will be determined by the value given to your case. This value will certainly be smaller than your view of the value of your claims. The efforts of the insurance company, and its payments to the defense firm, will be targeted at either disposing of our claims so that nothing will be paid to you, or greatly reducing the compensation due to you. "Delay" is one of their most powerful tools. You will get frustrated, memory will fade, documents will get lost and even important witnesses might die. All of this favors the insurer and your former attorney.
Even if the insurer recognizes that some compensation is due to you, it will delay paying you for as long as possible allowing the reserve fund to gain interest for the benefit of the insurance company.
Other things you will want to determine about the insurance coverage include the amount of the deductible that must be paid by the attorney, and whether the policy is large enough to cover your damages.
Typically, if the deductible is large, your former attorney may want to litigate against your claims to avoid paying anything out of pocket. Sometimes the insurer will allow your former attorney to appear pro se to try to get rid of the case. Even if the deductible is small, the insurance company will insist that their law firm assemble a lot of facts about the case before any decision is made about settlement. This can take years.
Assuming the policy is large enough to cover your damages, you have to assess whether your claims will in fact be covered by the insurance contract, or whether they will be excluded. Insurance does not cover intentional torts or the return of paid legal fees. Even if the nature of the claim is such that the insurer will not pay compensation, the insurance company will generally pay a new law firm to defend against your claim.
Oops, no insurance? If your attorney does not have any insurance coverage, the circumstances of litigation will be even more difficult than those set out above. He will likely appear pro se, boldly lie about your claims, personally attack you as a former client, blame you for the mistakes and injuries, and subject you to unnecessary litigation expense intended to break your back economically. And the judicial system will rarely stop these antics.
Another important calculation for you to make if your attorney has no insurance, is whether he is "judgement proof." Does he have reachable assets? Is your attorney too old to continue working so that future income can not be attached in the event you do win a legal malpractice judgement? If there are no reachable assets, it may be worthwhile to investigate whether your attorney made himself judgement proof by fraudulently transferring assets. We see this all the time. (See the Kovler case.)
