These are the clients from hell. And unfortunately you are not immune even if you decline to represent the client or they were the opposing litigant. Next thing you know you receive a notice that you have been filed upon for malpractice. A few of these folks file these suits hoping that you will not respond and then collecting upon you. They are basically professional litigants.
What every their motive, we get asked this question way too often. The attorney either represented the abusive litigant in an action or filed against the litigant. Now the attorney gets dragged into the web of the malpractice claimants created by this litigant. You may be in good company as this litigant may have filed against every judge, state or federal official.
Although the case is clearly frivolous, the attorney needs to let the malpractice insurer know. Handling the case by your self is not a good idea. Not letting the insurer know may open up defenses for the malpractice insurer to deny coverage on other claims.
Best advice is to notify your insurer promptly and discuss with the claims department on how to best dispose of the case and get on with life. Most insurers will not hold this claim against you, especially if it is an isolated incident.