"But for" and "case within the case" weakening.

• Author: Spellmire, George W.

Writing in the April newsletter of the Professional Errors and Omissions Committee, George W. Spellmire and Denise A. Johnson of D'Ancona & Pflaum, Chicago, discuss the changes in the legal malpractice landscape:

Traditionally, the "case within the case" doctrine applied in legal malpractice cases has been a formidable obstacle to claimants and the final stronghold for the lawyer-defendant. While not based on a scientific survey, experience has shown that the "but for" rule and the case within the case doctrine, which focuses on the legal and factual validity of the claimant's underlying rights, have been the most effective legal concept in the defense of actions against attorneys. This is true whether the underlying matter involved transactions or litigation.

However, in recent years, the problem of former clients claiming that their attorneys engaged in negligent settlements has increased, decreasing the effect of the "but for" rule by shifting the burden of proof to attorney-defendants. Courts also have decreased the impact of the but for rule and the case within the case doctrine in other ways. They have accepted claims for negligent settlement, negligent settlement negotiation, and even negligent business/ transaction negotiation as stating causes of action against lawyers. The judicial acceptance of negligent settlement/negotiation circumvents the requirement that the client, in fact, lost a subsisting right, whether in the litigation or transactional context. See Campbell v. Magana, 8 Cal.Rptr. 32 (Cal.App. 1960).

For example, in Scognamillo v. Olsen, 795 P.2d 1357 (Colo. App. 1990), former clients charged defense counsel with impermissibly representing conflicting interests. At trial, the court allowed the plaintiffs to introduce expert testimony regarding what a reasonable client would have done under the particular circumstances confronting the plaintiffs, and that, had plaintiffs had separate counsel, they would have settled.

The court stated:

Defendants next argue that the trial court abused its discretion in allowing plaintiffs' expert to testify that plaintiffs would have settled if represented in the Alling trial by separate counsel. We disagree. [Colorado Rule of Evidence] 702 permits expert testimony if "scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue." The basis for admissibility under CRE 702 is, thus, not that the witness possesses skill in a particular field, but that "the witness can offer assistance on a matter not within the knowledge or common experience of people or ordinary intelligence." McNelly v. Smith, 149 Colo. 177, 368 P.2d 555 (1962). Here, both plaintiffs' experts opined that the Alling case would have been settled without trial if Volger, Scognamillo, and Faircloth had been represented by separate counsel. Whether to accept a settlement offer is ultimately the decision of the client. The expert's opinions in this regard focus, therefore, on what a reasonable client would have done under the particular circumstances confronting the plaintiffs. Based on the record here, the long experience of the experts relative to client settlement decisions entitled them to opine on this issue, and there was thus no error in receiving their testimony in this regard. In addition, in Wood v. McGrath, North, Mullin & Kratz, 581 N.W.2d 107 (Neb. App. 1998), expert testimony was allowed as to the likely outcome of litigation. The Nebraska Court of Appeals stated:

The law states generally that an expert may testify about a reasonable and probable outcome at trial. McWhirt v. Heavey, 250 Neb....