Description of practice area
- Business Transactions/Commercial Law: Includes sales agreements, agency agreements, entertainment contracts, commercial transactions including financing where real estate is not the major subject.
Business Transactions/Commercial Law does NOT include:
- Corporate and Business Organization: Includes all aspects of the formation, operation, sale and dissolution of corporations, partnerships (general and limited), agency and other forms of business organizations. It includes matters related to Sarbanes-Oxley and other corporate governance obligations. It does not include business transactions such as sales, employment agreements and commercial transactions that are covered by the category Business Transactions/Commercial Law.
Source: ABA Profile of Legal Malpractice, 2011
- 190– Approximate number of reported Business Transactions claims per year.
- $12.65 million– Average yearly cost (indemnity and defense) of Business Transactions claims per year for the last 5 years.
- $140,000– Average per claim cost for a BT claim.
- 24%– Share of firms (with 34 or fewer attorneys) written by CNA that report doing Business Transactions work as a part of their practice.
- $120 million– Approximate amount paid by CNA for BT claims losses over a ten year period.
Source: CNA Claim Data 2006-2014
Severity of Business Transactions Claims
Claims severity for the Business Transactions practice area at CNA surged during the economic downturn of 2008, peaking in 2009. Today, claims severity for Business Transactions remains markedly higher than all other AOPs.
Top Causes of Business Transactions Claims
- Improper Drawn/Recorded Documents
- Conflicts of Interest
- Failure to Know/Properly Apply the Law
- Improper Handling of Disbursement of Funds
Source: CNA Claim Data
Nearly 70% of all business transactions claims are instituted against attorneys who reported that business transactions practice generated 5% or less of their annual revenues.