Transcript Document

Five Ways To Avoid A
Legal Malpractice
Claim
© Murphy Pearson Bradley & Feeney, All Rights Reserved
Janet L. Everson, Esq.
Murphy Pearson Bradley & Feeney
88 Kearny Street, 10th Floor
San Francisco, CA 94108
(415) 788-1900
(415) 393-8087 fax
[email protected]
I.
DEFINE YOUR ROLE
National statistics show that legal malpractice claims arise out of every area of the practice of law.
Many claims arise from matters involving conflicting interests among jointly represented clients or between client and counsel.
Misunderstandings between client and counsel can be limited simply by identifying who is the client and by defining the lawyer’s role at the outset o
• National statistics show that legal
malpractice claims arise out of every area
of the practice of law.
• Many claims arise from matters involving
conflicting
interests
among
jointly
represented clients or between client and
counsel.
• Misunderstandings between client and
counsel can be limited simply by
identifying who is the client and by defining
the lawyer’s role at the outset of the
representation.
A.
Avoid Conflicts of Interest
• Two parties on opposite sides of one
transaction want one lawyer to represent
them both.
• One partner to a partnership wants to
have actions performed on behalf of the
partnership without the involvement of the
other partner.
• Two parties to a proposed agreement
want the lawyer to act as a scrivener only.
• Multiple individuals want one lawyer to
represent them jointly.
As a matter of law, the attorney-client
relationship is a fiduciary relationship which
makes it improper for an attorney to act
contrary to, or to assume a position
inconsistent with, the interests of his present
or former client.
A lawyer may represent two or more clients
with potential conflicts of interest only after
the lawyer has fully disclosed the potential
conflicts to the clients and has obtained the
informed, written consent of the clients to
the joint representation.
See Cal. Rules of Prof. Conduct, 3-300 and 3-310;
Model Rule 1.7
Comment to Rule 1.7:
“[W]hen a disinterested lawyer would
conclude that the client should not agree
to
the
representation
under
the
circumstances, the lawyer involved
cannot properly ask for such an
agreement or provide representation on
the basis of the client’s consent.”
Always advise the client to seek
an independent review of the
conflict before they agree to the
joint representation.
B. Create A Written
Legal Services Agreement
The existence of an attorney-client
relationship which gives rise to a duty of
care to a client is created by an agreement
or contract.
Budd v. Nixon (1971) 6 Cal.3d 195, 200.
• Identify your client
• Specify the services to be performed
• Limit your exposure
Cal. Rules Prof. Conduct, Rule 3-400
A member shall not:
(A) Contract with a client prospectively limiting the member's
liability to the client for the member’s professional
malpractice; or
(B) Settle a claim or potential claim for the member’s liability
to the client for the member’s professional malpractice,
unless the client is informed in writing that the client may
seek the advice of an independent lawyer of the client’s
choice regarding the settlement and is given a reasonable
opportunity to seek that advice.
It is not unethical for an attorney to limit his
or her potential liability for legal malpractice
by contractually limiting the scope of the
representation or the duration of the
representation.
Cal. Rules of Prof. Conduct, Rule 3-400 A,
Nichols v. Keller (supra) at 1684.
Cal. Bus. & Prof. Code Sec. 6148
(a) In any case . . . which it is reasonably
foreseeable that total expense . . . will exceed
one thousand dollars ($1,000), the contract for
services in the case shall be in writing . . .
The written contract shall contain all of the
following:
Cal. Bus. & Prof. Code Sec. 6148 (cont.)
The written contract shall contain all of the following:
(1) Any basis of compensation . . .
(2) The general nature of the legal services to be
provided
(3) The respective responsibilities of the attorney and
the client . . .
(c) Failure to comply with any provision of this section
renders the agreement voidable at the option of the
client, and the attorney shall, upon the agreement being
voided, be entitled to collect a reasonable fee . . .
Section 6148 does not apply to corporate
clients.
There is no statutory authority in California
requiring attorneys to create written fee
agreements when they are employed by a
corporation.
Put All Fee Agreements
In Writing
ABA Model Rule 1.8
In jurisdictions that have adopted the Model
Rules, a lawyer is required to use a written
agreement when representing clients on a
contingent fee basis.
United States v. 36.06 Acres of Land,
(D.N.M. 1999) 70 F.Supp. 2d 1272.
Model Rule 1.8 requires inclusion of an
explanation of the client’s responsibility for
court costs and litigation expenses.
Varner v. Eves (Or. Ct. App. 1999) 990 P.2d 357
Foodtown Inc of Jacksonville v. Argonaut
Insurance Co, 102 F.3d 483 (11 Cir. 1996)
Alholm v. O’Bryan Law Center, P.C. (D.Minn.)
2000 WL 1196202
II.
MAKE A GOOD RECORD
• Communicating with the client
• Confirming what the client does want
• Confirming what the client does not want
. . . is not just good business practice, it is
required under some jurisdiction’s rules of
professional conduct.
Cal. Bus. Prof. Code §6068m
“[R]espond promptly to reasonable status
inquiries of clients and keep clients
reasonably
informed
of
significant
developments in matters with regard to
which the attorney has agreed to provide
legal services.”
A client directive to not do something that
the lawyer has suggested certainly is a
significant development in the case.
Settlement Offers
and
Settlement Negotiations
California Rules of Professional Conduct,
Rule 3-500, requires that the client be
reasonably informed about significant
developments and significant documents.
Rule 3-510 requires communications with
the client of all terms and conditions of any
settlement offer.
Other jurisdictions have similar requirements.
Miller v. Byrne (Colo. Ct. App. 1995) 916 P.2d 566
Rizzo v. Haines (Pa. 1989) 555 A.2d 58
Aller v. Law Office of Carole E. Schiefer (Colo 2006) 140
P.3d 23
The following scenarios provide examples of
situations requiring a written record of what
has transpired between lawyer and client:
Scenario A
During settlement negotiations, the client
insists that the value of the case is exactly
what it would be if he or she won at trial.
A client’s consent to a
settlement provides no
guarantee that a
malpractice suit will not
later be filed
Scenario B
A defiant defendant refuses to consider that
the case has any potential exposure to him
or her
Keeping a client advised, in writing of
significant
developments,
particularly
settlement negotiations, will reduce the
chance that you will successfully be sued for
malpractice.
Sauer v. Flanagan and Maniotis, P.A. (FL 2000)
748 So.2d 1079
Glenna v Sullivan (1976 Minn) 245 NW2d 869
Nause v Goldman (1975, Miss) 321 So 2d 304
Gibson v. Herman, Herman, Katz & Cotlar, LLP,
(La. Ct. App. 4th Cir. 2006) 927 So. 2d 1178
Popescu v. McCarthy, (2000) 706 N.Y.S.2d 98
III.
MAKE A CLEAN,
AND CLEAR, BREAK
A. Send A Termination Letter
And Withdraw From The
Representation
Sending the client a letter terminating the
representation acts to:
• Stop a claim that you have continued to
represent the client
• Triggers the accrual of the statute of
limitations in (most situations).
Unfortunately, courts have been pretty clear
that termination is not really termination until
and unless it is terminated by operation of
law, withdrawal, discharge, or the mutual
consent and agreement of the parties.
Hensley v. Caietti (1983) 13 Cal.App.4th
1165, 1170.
If in litigation, move to withdraw
from the representation as well.
Rules of Professional Conduct at 3700(a)(2),
preclude an attorney from withdrawing until
the attorney has taken “reasonable steps to
avoid reasonably foreseeable prejudice to
the rights of the client, including giving due
notice to the client, allowing time for
employment of other counsel, and
complying with applicable laws and rules.”
Other jurisdictions impose a similar duty to
act with reasonable care and in full
consideration of the rights of the client.
Sanders, Bruin, Coll & Worley P.A. v. McKay Oil Corp
(N.M. 1997) 943 P.2d 104; Bell v. Clark (Ind. Ct. App.
1995) 653 N.E. 2d 483; Delesdernier v. Porterie (5th Cir.
1982) 666 F.2d 116.
The attorney is responsible for providing the
client all original files connected with the
client’s case upon reasonable request . . .
even if the client owes you money.
Cal. Rules Prof. Conduct, Rule 3-700(d)(1)
Once the attorney-client relationship has
been terminated, the attorney does not have
a duty to represent the client in any other
matter.
Branlin v. Belcher (1977) 67 Cal. App. 3d 997.
In the situation where a lawyer refers a client
to a different attorney, it is imperative to
confirm in writing that the attorney no longer
represents the client in that specific subject
matter.
B. Send A Disengagement Letter
The
attorney-client
relationship
can
terminate when the task the lawyer was
hired to perform has been completed.
Panattoni v. Superior Court (1989) 203 Cal.App.3d
1092.
C. Send A Non-Engagement Letter
Failure to send a non-engagement letter
may give rise to a claim that an attorney
client relationship was created.
Fox v. Pollack (1986) 181 Cal.App.3d 954, 959;
Morris v. Margulis (Ill. App. Ct. 1999) 718 N.E.2d
709.
IV.
ENFORCE THE TERMS OF YOUR
LEGAL SERVICES AGREEMENT
WITH CAUTION
Know you jurisdiction’s statute of limitations
on malpractice actions.
In California, the statute of limitations for
filing an action against an attorney is one
year under most circumstances.
The statute of limitations to sue a client for
breach of the legal services contract is
longer.
WAIT TO SUE
FOR YOUR FEES!!
If the lawyer does not wait, in most
circumstances the lawyer will draw a crosscomplaint for malpractice as soon as the suit
for fees is filed.
Several courts have held that a tort action
stemming out of the same transaction as a
breach of contract claim is a compulsory
counterclaim to the contract action.
Crutcher v. Aetna Life Insurance Co., (5th Cir.
1984) 746 F.2d 1076, 1080 (suit for breach of
fiduciary duty and tortious interference is
compulsory counterclaim to action to recover on
guaranty)
Cleckner v. Republic Van & Storage Co., (5th Cir.
1977) 556 F.2d 766 (negligence claim for damage
to goods is compulsory counterclaim to suit by
movers for failure to pay)
In re McCoy, (D.Tex. 1974) 373 F.Supp. 870, 873
(medical malpractice claim is compulsory
counterclaim to suit for unpaid doctor's fees)
Black v. Dillon, (1963) 213 Cal.App.2d 295; Law
Offices of Jerris Leonard, P.C. v. Mideast
Systems, Ltd. (D.D.C. 1986) 111 F.R.D. 359, 360
(legal malpractice)
Once the statue of limitations has run for
malpractice, the only relief available to a
former client for alleged malpractice is an
offset to the fee claim.
V.
COMMUNICATE
COMMUNICATE
COMMUNICATE
More than half of all claims arise from the
lawyer’s failure to communicate with the
client, whether it is risk assessment or
informed consent.
Assurance Co. of America v. Haven (1995) 38 Cal.
Rptr. 2d 25
Metcalfe v. Waters (Tenn. 1998) 970 S.W.2d 448.
More often than not . . .
Happy clients
do not sue for malpractice.