Understanding Legal Malpractice
| Publication year | 1998 |
| Pages | 13 |
| Citation | Vol. 11 No. 1 Pg. 13 |
Michael F. Skolnick and Richard Masson
Legal malpractice claims threaten every attorney. An increasing number of us can expect to be sued during our professional lives. While most insurers report only gradual increases in the number and size of legal malpractice claims, the same insurers report that it is becoming progressively more expensive to resolve such issues.[1]
Malpractice claims can be intimidating and demoralizing. The vast majority of attorneys strive on a daily basis to practice competently and effectively on behalf of their clients. When clients sue them, attorneys often feel betrayed and bewildered. Knowing the basics of malpractice law may help prevent a lawsuit against you. If the unspeakable occurs and you are sued, some background knowledge can help ease your burden by making your defense more clear.
This article presents an overview of legal malpractice law in Utah and some related principles of basic risk management. The term "legal malpractice" as used in this article covers actions for professional negligence, breach of fiduciary duty, breach of contract and other statutory and common law causes of action. It does not include violations of the Utah Rules of Professional Conduct, which may subject an attorney to discipline by the Utah State Bar, but do not by themselves give rise to a cause of action for legal malpractice.[2] Nevertheless, courts have found such ethical standards relevant to the standard of care in legal malpractice actions.[3]
PROFESSIONAL NEGLIGENCE
Three distinct causes of action are available in Utah for an attorney's malpractice: (1) the tort of malpractice (professional negligence); (2) breach of fiduciary duty; and (3) breach of contract. Professional negligence is the most common vehicle for malpractice claims in Utah.[4]The four elements of a tort malpractice claim are: (1) an attorney-client relationship; (2) a duty of care owed by the attorney to the client arising from that relationship; (3) a breach of the duty; and (4) proximate causation of actual damage to the plaintiff.[5]
THE ATTORNEY-CLIENT RELATIONSHIP
An attorney-client relationship can arise from an express contract or by an implied in fact contract based on the conduct of the parties.[6]In order to determine whether an attorney-client relationship exists, courts must consider who the attorney claimed to have represented in his own pleadings or other self-generated documents, whether an employment contract or retainer agreement exists and the parties' admissions about the relationship[7]
An attorney-client relationship may be proved by showing that the client sought and received the advice of the lawyer in matter pertinent to the lawyer's profession. The client's mere belief, however, that an attorney-client relationship exists, unless reasonably induced by representations or conduct of the attorney, is not sufficient to create the relationship.[8]Payment of attorney fees does not by itself determine whether an attorney-client relationship exists, but is only one indicia of such a relationship.[9]
The attorney-client relationship would seem to be the most straight-forward of the four elements of a tort malpractice claim. The relationship is, however, not always as simple as it looks. Take, for instance, the increasingly prevalent practice of office sharing, where an attorney rents an office from a law firm or in concert with a number of solo practitioners. If one attorney in the office sharing relationship gets sued, the other attorneys in the relationship may assume that they are not exposed to the claim. That is not necessarily true.
No matter the understanding of the relationship among the attorneys, a de facto partnership may exist for the purposes of liability to a client.[10]In order to safeguard against a de facto partnership (and hence establishment of an attorney-client relationship with your office sharing attorneys' clients) avoid acts or omissions that could lead a client to reasonably believe that he was being represented by an entity rather than the individual attorney.
Use of a joint name on letterheads and pleadings can lead to joint liability. Prudence dictates that attorneys practicing in any kind of association or non-partnership arrangement should expressly specify on their letterhead and in their pleadings the nature of the entity. Retainer agreements should reiterate the legal nature of the entity and should also delineate to what extent the client will receive the services and assistance of other attorneys in the association.[11]
Attorneys should define the scope of the attorney-client relationship at the outset of each case by sending clear and precise engagement letters. If representation is declined, a rejection letter should be sent as soon as possible, warning the client of the applicable limitation period. Finally, avoid the practice of "ghost-writing" pleadings for friends that want to handle a case pro se. An attorney-client relationship may be formed, with all of its attendant obligations[12]
DUTY OF CARE
An attorney is required to possess the legal knowledge and skills common to members of his profession, and to represent his client's interests with competence and diligence.[13] An attorney, however, is not required to know all the law, nor to second guess the trial judge.[14]If an attorney holds himself out as a specialist in a particular field of law he has a duty to have the knowledge and skill ordinarily possessed, and to use the care and skill ordinarily used, by reputable specialists practicing in the same field, in the same or a similar locality and under similar circumstances.[15]
Unfortunately, attorneys sometimes take cases that deal with areas of law in which they have little skill or knowledge. Consequently, the attorney may end up spending either too much time with the case trying to learn the details of the applicable law, make substantial errors due to lack of experience or knowledge, or may not pay the case the proper amount of attention. In any event, the attorney may ultimately end up hurting the client.[16]
Sometimes attorneys become overwhelmed by their case load and lose track of important dates, like filing deadlines.[17]It is important for an attorney with a high-volume practice to keep it manageable. Malpractice claims often result from administrative error.[18]Many administrative errors can be easily solved by instituting a docketing and scheduling system. Not only will such a case management system be helpful to the attorney, but it will also make the client feel more confident in the attorney's representation. Insurance underwriters look for these types of case management systems when underwriting legal malpractice risks.
Where the attorney is charged with an error regarding law, the applicable law is the law in the relevant jurisdiction that existed at the time the attorney's services were rendered.[19]In Watkiss & Saperstein v. Williams, the Utah Supreme...
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