How therapists and counselors can avoid malpractice lawsuits

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Psychologists, family therapists, school counselors, and other mental health professionals interact with their clients on a deeply personal level and use their expertise to provide care. To avoid malpractice lawsuits, it’s crucial to establish boundaries, keep meticulous records, and adhere to the ethical standards of your profession.
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Therapists and counselors are in a unique position in terms of liability. To look out for your patient’s well-being, you need to be aware of details in their personal life. However, you also need to maintain a professional relationship with each patient and respect their right to privacy and confidentiality. If boundaries break down, the result could be a medical malpractice lawsuit against your private practice.

In addition to thorny legal issues involving therapist-client relationships, there’s also the danger of a claim that you violated the standard of care, provided an inaccurate diagnosis, or gave advice that caused emotional distress. Even if you’ve done nothing wrong, you may find yourself defending against a malpractice claim brought by a dissatisfied client.

What is medical malpractice for a therapist or counselor?

A client can’t just sue a therapist if they’re dissatisfied with their advice and counseling. A legal case for medical malpractice (also known as professional liability) must establish the following:

  • An official therapist-client relationship exists between the two
  • The counselor failed to fulfill a duty of care
  • The client was mentally or physically injured
  • The injury was the direct result of a therapist’s negligence

What is “duty of care?”

Duty of care refers to the type and quality of care that mental health care professionals must give to clients, based on the ethics and guidelines of their profession.

It’s similar to “standard of care,” which refers to the type of care that healthcare providers typically provide for patients in any given situation.

If a married couple winds up getting divorced, it’s unlikely they could sue their marriage counselor as long as the counselor followed the guidelines of the profession and provided the advice that a reasonable person would consider sufficient. If the counselor did not, that could be considered breach of duty.

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What steps can therapists and counselors take to avoid malpractice suits?

Therapists and counselors face a wide range of malpractice claims. Luckily, most can be avoided with adequate preparation and care.

Here's how to avoid some of the most common lawsuits in the industry:

1. Follow the standards outlined in the Diagnostic and Statistical Manual of Mental Disorders (DSM)

Maintaining the ethical and professional standards of your profession is the first step in avoiding a malpractice claim. A working knowledge of the American Psychological Association’s Diagnostic and Statistical Manual of Mental Disorders (DSM) can help you avoid a malpractice lawsuit in the first place and help your legal defense if you can demonstrate your knowledge of these standards and how you followed them.

Counselors and therapists are expected to follow certain procedures in providing care, known as the “medical model.” This involves taking notes, documenting the type of treatment, and receiving informed consent from clients. Procedures and standards that stray from the DSM could result in lawsuits, financial sanctions, or loss of a license.

2. Maintain a professional relationship

Therapists should avoid personal and business relationships with clients. All contact should be related to therapy and treatment.

A business relationship might involve a therapist investing in or launching a business venture with a client, or a therapist trying to sell investments or products to a client.

A sexual relationship with a client is considered a huge breach of ethical standards. It could result in an allegation of sexual misconduct or sexual abuse. A counselor who tried to excuse this behavior by claiming to be in love with a client would be unlikely to win in court.

To maintain appropriate boundaries, avoid seeing clients in personal settings, such as private parties, which could land you in trouble with your profession. It’s also a good idea to maintain a log of all contacts between yourself and the patient whether it’s in the office, over the phone, or a chance encounter somewhere else.

3. Take meticulous notes

Keeping detailed notes about your therapy sessions, including summaries of what was said between yourself and your patient, is required by your profession and can be your first line of defense against a claim.

Documentation must include any suicide attempts by a client, medications, treatment methods and any changes to those methods. Failure to take accurate notes, or to take any notes at all, could lead to disciplinary actions and a lawsuit.

4. Avoid unapproved methods

Psychologists and other therapists are supposed to use documented and accepted definitions of mental health conditions and treatments. A therapist who uses unaccepted syndromes in their diagnosis and treatment sessions could face a client lawsuit and a complaint with their state’s licensing board.

A therapist must balance each client's right to privacy against other people's safety and a family's ability to help the client at home.

5. Avoid inappropriate or excessive self-disclosure

It’s not unusual for therapists to offer personal examples in order to help a client. However, the disclosure must relate to the client’s own circumstances, and not focus on the therapist’s problems and needs over that of the client.

6. Do not offer treatments beyond your qualifications

A counselor or therapist who tries a technique they aren’t fully trained in or qualified for could find themselves in trouble with their state licensing board and face a client lawsuit as well.

7. Obtain your clients’ history

Counselors are supposed to obtain a client’s history that includes their symptoms, previous therapy treatments, their physical health, and the mental health history of the client and their family. Failure to do so could leave a counselor open to an ethical complaint or lawsuit.

8. Take part in peer reviews

It’s a good idea for psychotherapists to have a group of experts in the profession they consult with on a regular basis to discuss treatment methods. This peer review group can help the therapist maintain the standards of their profession. This can also help counselors defend themselves against clients who claim they failed to provide the required standard of care.

9. Maintain client confidentiality

Therapist-client confidentiality creates trust and enables you to do your job. Healthcare professionals must maintain confidentiality unless a threat against others seems valid.

While client confidentiality is crucial, a therapist may need to involve a client's family in looking out for their mental health. This is especially true if a client exhibits violent thoughts or behavior against themselves or other people. A therapist must balance each client’s right to privacy against other people’s safety and a family’s ability to help the client at home.

It’s also important to protect the sensitive and confidential information you need to provide therapy and run your business. This includes client files and treatment information, but also their personally identifiable information such as their address, insurance information, and other data.

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Whether your business involves family therapy, wellness counseling, or drug and alcohol addiction treatment, insuring your business can be an important part of your risk management plan. Complete Insureon’s easy online application today to compare free quotes for therapist malpractice insurance and other policies from top-rated U.S. carriers. Once you find the right policies for your small business, you can begin coverage in less than 24 hours.

Sophie Mir, Content Specialist

Sophie specializes in content development and uploading, including social media. Throughout her career, she’s created and edited a variety of deliverables, such as articles, blog posts, newsletters, reports, video scripts, webinars and white papers. Before joining Insureon, Sophie worked in communications at GoHealth, drafting and distributing content related to internal organizational changes and announcements.

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