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When Does a Mistake Become Malpractice?

Posted by Joe Barnard, CPA on May 29, 2018 5:08:00 PM
Joe Barnard, CPA
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discovering mistakeNot all mistakes that lawyers make rise to the level of “legal malpractice.” In fact, proving legal malpractice is no easy task.

The Legal Elements of Malpractice 

The lion’s share of legal malpractice cases are based on a theory of negligence, although claims for breach of contract and certain other causes of action are also possible in various jurisdictions. In cases based on a theory of negligence, a complainant needs to prove the following elements:

  1. The lawyer owed a duty to the complainant (e.g., to provide competent and skillful legal representation or advice, to safeguard funds in accordance with client trust laws, etc.);
  2. The lawyer breached the duty (by acting recklessly or carelessly, failing to meet the expected standard of care, committing a criminal act, etc.);
  3. The lawyer's breach resulted in injury or harm to the complainant; and
  4. The complainant suffered a financial loss as a result of the lawyer’s actions or omissions.

In addition to proving these four elements, in many jurisdictions a plaintiff needs to prove to the court that he or she would have prevailed in the case at issue if it weren’t for the malpractice.

To Whom Does a Lawyer Owe a Duty?

With certain limited exceptions, a lawyer only owes a duty to a client; generally, a person who was not a client may not sue an attorney for legal malpractice. Usually, an attorney-client relationship is created by a written contract or agreement, but in some cases it can also be implied based on the actions of the parties. Whether the parties have formed an attorney-client relationship or whether they have taken other actions that give rise to the existence of a duty under local laws and rules of professional conduct will depend on the facts of each case.

What Is a Breach of Duty?

Not every mistake made by an attorney is considered legal malpractice, nor is every decision that turns out to be wrong or disadvantageous. In many jurisdictions, the standard of care is that of a reasonably prudent attorney in a similar geographic location and, if appropriate, specialization. Under this standard, if an attorney makes a decision that such a reasonably prudent attorney could make in the same or similar circumstance, it is not an act of negligence—even if the result is undesirable or the decision later proves to be imperfect.

What Are “Injury” and “Financial Loss”?

With regard to the third and fourth elements, many jurisdictions require, in order to prove “injury,” that a client show that if the attorney had not been negligent or otherwise acted wrongfully, the underlying case would have been successful.[1] When this is the case, in a malpractice claim involving a civil matter, the measure of a complainant’s damages also depends on the underlying case. To determine this amount, the client must prove what damages would have been recoverable and collectible if the underlying case had been properly prosecuted.[2] Calculating and proving these factors can be difficult and depends on a multitude of variables.

Common Kinds of Malpractice

Some common kinds of malpractice include

  • Failure to meet a filing or service deadline,
  • Failure to sue within the statute of limitations,
  • Failure to perform a conflicts check,
  • Failure to apply the law correctly to a client’s situation,
  • Abuse of a client’s trust account, such as commingling trust account funds with an attorney’s personal funds, and
  • Failure to return telephone calls.

These and other mistakes and violations of the Rules of Professional Conduct can lead to civil legal malpractice lawsuits, complaints to the state bar or attorney disciplinary authority, or criminal prosecution, depending on the alleged conduct. The state bar may impose disciplinary sanctions, such as fines or disbarment, in addition to any civil or criminal penalties.

Professional Liability Insurance Protection

Not all types of malpractice can be avoided simply by being careful and diligent. Having E&O insurance in place throughout your career protects you from potentially catastrophic losses that can result from malpractice claims. Defending against a claim of malpractice can be nerve-wracking, time-consuming, and expensive. Professional liability insurance can provide both the financial security of covering the costs of defense and any settlement or judgment and the peace of mind of providing an experienced legal malpractice defense team to advocate on your behalf. Contact ProDefender today to discuss your options for obtaining coverage.

 

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[1]See, e.g., Jackson v. Urban, Coolidge, Pennington & Scott, 516 S.W.2d 948, 949 (Tex. Civ. App.—Houston [1st Dist.] 1974, writ ref’d n.r.e.)

[2] See, e.g., Akin, Gump, Strauss, Hauer & Feld, L.L.P. v. National Dev. & Research Corp., 299 S.W.3d 106, 109, 112 (Tex. 2009).

Topics: Lawyers Professional Liability, Legal Malpractice


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