Professional Liability Claim

Resolving the Dispute

Most disputes involving professional service firms are resolved through negotiated settlement or mediation. At times, usually because of contractual obligations,
mandatory and binding arbitration between a client and professional is used. Each dispute resolution process has characteristics that may make it an effective way to deal
with the facts and circumstances of a particular claim.
Mediation
Mediation is a process where an impartial facilitator actively assists the parties in clarifying issues of concern and reaching agreement on solutions for those issues. For
mediation to work effectively, it is important that:

• the mediator be carefully selected on the basis of qualification, reputation, and knowledge in the design and construction process;
• representatives of the parties with authority to resolve the dispute directly and personally participate in person or by telephone in the mediation process; and
• the parties be willing to participate in the process in good faith and maintain an open mind with respect to the issues in question.
Arbitration
Arbitration provides an alternative form of adjudication. The parties agree, usually by contract, to have an arbitrator or panel of arbitrators rule on the merits of their claims. The
parties must agree on the rules for selection of arbitrators and on the rules for the arbitration process. Organizations such as the American Arbitration Association (adr.org)
have been created to provide standardized rules, a panel of prequalified construction industry arbitrators, and administration of the arbitration process.
Arbitration results in an award being determined. Arbitration awards are not self-effectuating; the parties have to enter the award into the record in an appropriate
court to create an enforceable judgment.
Litigation
A lawsuit typically commences with the filing of a complaint or petition with a court by an allegedly harmed party—the plaintiff. A summons is then issued and
served on the party who allegedly caused the harm—the defendant. In addition to identifying the defendant, the complaint presents the plaintiff’s cause of action, which
describes the facts from the plaintiff’s point of view, identifies the theories of alleged liability, and states the damages claimed. The defendant must respond to the complaint with a
motion to dismiss or an answer, either admitting or denying the allegations, within a specified time period. Failure to respond in a timely manner may result in a
default judgment in favor of the plaintiff. If the defendant also has a claim against the plaintiff, a counterclaim can be filed. Both the plaintiff’s claim and the defendant’s
counterclaim will be subject to resolution in court. If the defendant believes that the suit is based on the actions of a third party, the defendant may add that party
as a third-party defendant. Alternatively, if the plaintiff  initially filed suit against both parties, a cross-complaint could be filed against the co-defendant. Third-party complaints and cross-complaints typically seek indemnity and/or contribution to the potential verdict. In this context, indemnity means shifting the economic loss to the party responsible for that loss, and contribution means partial reimbursement from another party jointly responsible for the economic loss. At this point, the lawsuit would include all the parties necessary to resolve all the issues.

Litigating a Claim
Few professional liability claims are resolved through trial; many are resolved, however, because of the litigation process. The steps leading to a trial often lead to settlement.
Discovery Process

After the complaint is filed, and the defendant or defendants have answered, filed counterclaims, third-party complaints, and/or cross-complaints, the process known
as discovery usually begins. During this stage, attorneys for both sides investigate the facts of the lawsuit, the opinions of both parties, the opinions of experts, and the
existence and contents of relevant documents. As a result, the discovery process substantially reduces the probability of surprises during trial. Interrogatories, Requests for
Production, and Depositions Discovery may begin with serving interrogatories, which are written questions submitted by one party to another. Typically, the parties’ attorneys draft interrogatories and answers to interrogatories, but the parties assist their attorneys with content, and must verify the facts contained in their answers. Your expertise and knowledge of the client and circumstances that led up to the complaint are the basis for interrogatories addressed to the plaintiff. In responding to interrogatories sent to you, it is important
that answers are accurate and complete. Interrogatories may be used as the basis for your deposition, or for cross-examination during trial. Your defense counsel will review your answers before they are subscribed and sworn to by you. Another form of discovery is a request for the production of documents. This process allows each party to inspect
and copy all of the documents and other tangible evidence relevant to the case. Other discovery tools are depositions. The attorney for one party orally questions individuals who are believed to have knowledge of the facts involved in the suit. They answer these questions under oath while both questions and answers are recorded by a court reporter. Typically, the
most expensive and time-consuming phase of a lawsuit, discovery can continue from a few months to many years depending on the jurisdiction; the court involved; the applicable procedural rules; the complexity of the case; the discretion of the judge to whom the case is assigned; the strategies and tactics of the parties; and whether the parties see expeditious litigation or delays to be in their interests. Counsel will be present during all depositions to protect their client’s interests. Depositions serve two purposes: 1. they allow parties to obtain information that will assist in the preparation of their case for trial, and 2. they lock in the deponent’s testimony so that it can be later used to discredit or impeach the deponent as a witness at the trial if the testimony changes. The deposition also is used to gather evidence not otherwise available through the discovery process. It allows parties to the case the opportunity to verify the accuracy of evidence and statements; to determine the credibility, knowledge, and demeanor of witnesses; and to identify witnesses, defendants, or experts. A deposition has the same weight as live testimony at trial. As a named defendant, you have the right to attend any or all depositions in your case. It may be important for you to be present when the plaintiff is being deposed. Your presence might encourage more truthful responses, and may discourage the exaggeration of claimed damages. In addition, your attendance may be helpful when the plaintiff’s expert witness is being deposed. The expert’s critical opinions might be more tempered. And you might be able to assist your lawyer in formulating the most effective line of questioning. Depositions, although often physically and emotionally demanding and time consuming, move litigation toward a conclusion and end to your involvement. During the course of your deposition, your lawyer might voice objections to some questions. In this situation, the objection is being made to protect your interests. The rules of discovery allow the plaintiff’s attorney to question you in cross-examination style. You must be prepared to respond appropriately.

Motions for Dismissals At some point prior to trial, defense attorneys often attempt to have the case against their clients dismissed through a motion for summary judgment. This is a request filed with the judge to dismiss the suit before trial because the case against that defendant is not supported by expert testimony, or does not present facts that constitute a legal
basis sufficient to warrant disposition by trial. While it may seem clear to a defendant, for example, that there is no reasonable basis for the suit on either factual or legal
grounds, the courts will generally not grant summary judgment if it is determined that there are disputed facts. There might be a voluntary dismissal of the case by the plaintiff. This often occurs because the plaintiff is experiencing difficulties in obtaining expert testimony that supports the case. A case can be dismissed “without prejudice,” meaning that the plaintiff has additional time and may refile the suit. A defense motion might call for dismissal of the case for failure to comply with the court’s order regarding discovery of experts, or by a motion for summary judgment that argues that the evidence obtained through discovery did not generate a material issue of fact regarding your liability. If either of these motions is granted, it is usually “with prejudice,” meaning that the plaintiff cannot bring the same claim again in the future.

Settling a Claim
During litigation, cases often settle through discussions among the parties. A settlement is essentially a compromise whereby the parties agree about their respective rights and obligations, thereby eliminating the need for an adjudicated resolution of the dispute. Courts often forcefully facilitate settlements through court-supervised settlement conferences where attendance by the parties and their insurers is mandatory. When the parties agree to a settlement, a stipulation of dismissal is filed with the court. You should know that a
settlement is not an admission of liability. While in principle any unjustified claim should be thoroughly contested, it may become evident that there is considerable risk that what you might consider to be a meritless claim could result in a decision by a jury in favor of the plaintiff. Your attorney might feel that your case is not defensible because of poor documentation or lack of evidence or witnesses in your favor. Usually, however, a settlement occurs because, after investigation, is it apparent that some degree of negligence
is provable. A settlement might help you avoid loss of time, emotional turmoil, and the uncertainly involved in allowing the case to go to trial. You, with the advice of your defense
counsel and your claim professional, may decide that settlement is in your best interests.
Final Resolution in Court
If the case fails to settle, the legal process continues to either a bench trial, in which the judge is authorized to decide both the facts and the application of law, or to a jury trial, in which a jury renders a decision based on its perception of the credibility of the witnesses and information presented by the parties. At the conclusion of the trial, a judgment is entered,
which the prevailing party can enforce. Either side may have the option to appeal to an appellate court on the basis of alleged errors in the trial. Even when the appeal
is successful in overturning an adverse verdict for legal or procedural reasons, however, the result may be a remand by the appellate court to the trial court to conduct
additional hearings or an entirely new trial. It is not uncommon for more complex cases to be in the courts for many years before final disposition

For more information on the claims process please click here.