What is Considered Legal Malpractice?
Legal malpractice, in the most basic of definitions, is the failure of a legal professional to perform his or her duties, and as a result the client sustains damages. It is important to mention that legal malpractice is not strictly confined to litigation, but also includes transactional or other legal services. With this negligence on the part of the legal professional, the client must suffer some injury or loss that is directly related to the actions of the attorney for a claim to even be considered .
It is the failure to act, a breach of the standards of competence and diligence required of an attorney that ultimately results in a client pursuing a legal malpractice case. Such breaches occur for a variety of reasons, and some of the more common and significant examples include:
Economic-based claims resulting in loss, such as wrongful foreclosure and divorce settlements/decrees.
Legal Malpractice: Common Examples
Legal malpractice can take many forms, often exacerbated by the complexity of law itself. As such, it can be difficult for the average client to determine whether their attorney has committed malpractice until it is too late. Below are some common examples of legal malpractice:
Missed Deadlines One of the most common forms of legal malpractice is the failure to file court papers by the statute of limitations or by a court deadline. For each area of the law there are strict deadlines by which attorneys must act on behalf of their clients, if they wish to uphold the rights of their clients in any future action. For example, in a civil litigation case, the complaint must be filed within the statute of limitations, or within the deadline imposed by the court, otherwise the client will not be able to file the complaint at a later date.
Conflict of Interest In other cases of legal malpractice an attorney may have a conflict of interest with their client, and may not communicate this conflict to the client. Aside from a failure to disclose a conflict of interest, a lawyer may proceed with both representing a client and accepting compensation from the other side. For example, sometimes an attorney may have both the plaintiff and the defendant in a case as clients. A legal malpractice case can be brought against any attorney that fails to disclose and/or mismanages a conflict of interest.
Inadequate Knowledge of the Law Not knowing and applying the law is another form of professional negligence that can lead to a legal malpractice claim. A lawyer also has a duty to know the limitations of the law. For example, if an attorney fails to properly advise a client about a particular issue due to inadequate lawyering, that attorney could have committed legal malpractice if the legal advice constitutes the legal malpractice claim. Additionally, an attorney is expected to have substantial current knowledge of the law, failure to apply which could lead to legal malpractice.
Failure to Communicate While attorneys in New York work with clients of all backgrounds (and should be able to communicate in a variety of languages), not every attorney is capable of or has a duty to be able to communicate effectively with clients who do not speak English. If an attorney cannot adequately communicate with a client, both the attorney and the client risk crossing communication lines, which can lead to a legal malpractice case.
Failure to Comply with Client InstructIons Finally, there is a failure to comply with client instructions. While an attorney has a duty to exercise professional judgment on behalf of their client, they also have the duty to abide by the expressed wishes of their client. In other words, a New York attorney should never take any action contrary to the direct request of their client without good cause.
Improper Use of Client Funds
In situations where a lawyer requires the payment of retainer fees, it is typically considered malpractice if a lawyer fails to properly handle that money. For example, lawyers are expected to deposit retainers into special escrow accounts called "IOLTA accounts," which stand for Interest on Lawyers’ Trust Accounts. Funds held in IOLTA accounts are put into an interest-bearing account, and banks report interest to the appropriate state bar association which ultimately uses those funds for public good.
Improper handling of other types of funds placed in trust for other clients can also constitute legal malpractice. For example, even if funds held by a lawyer were not categorized as a retainer, they might still qualify as ‘property held by a lawyer for the benefit of another’.
Where it is determined that a lawyer failed to return funds from an IOLTA or other account, and damages result, it will probably be considered legal malpractice, and would give rise to causes of action for conversion and breach of fiduciary duty.
Fails to Know or Apply the Law
Of all of the reasons for legal malpractice, failing to know or apply the law is one of the most prominent. In any case in which there is either a motion to dismiss or motion for summary judgment, or both, the opposing party will always make a strong argument that you (the attorney) have failed to adequately research the controlling statutes and case law, failed to apply the statutes and case law and totaled up your failures by submitting papers that were conclusively deficient. This type of argument is made in almost every legal malpractice case and can pose a significant threat. In Gardner v. Schwartz, 2008 N.Y. Slip Op. 00744 (4th Dep’t 2008), the court noted that the attorney was sued because he failed to apply the law and precedent in an affirmative case, and instead relied exclusively on his theory with no solid legal basis. In that case, the attorney was representing the plaintiff in a personal injury action, and a motion for summary judgment was granted. The issue was whether plaintiff underwent prompt surgery to obtain medical care. However, "plaintiff submitted as proof a written waiver of the statutory 30-day waiting period for obtaining surgery, completed by defendant to facilitate plaintiff’s efforts to obtain the necessary medical treatment." (emphasis added). But "under the pertinent statute, such a waiver does not cure the deficiency in plaintiff’s opposition papers in opposing the motion for summary judgment." In Heller v. Velez, 117 A.D. 2d 720 (2d Dep’t 1986) the court noted that "it is settled that an attorney may be liable for negligently failing to follow applicable statutory and case law in the commencement of an action . . ." "In general, an attorney may be held liable for failing to follow the law." If the attorney fails to do the necessary research into caselaw and jurisdiction (for example, if the attorney works in another jurisdiction, and fails to understand and cite to the laws in the venue where he is practicing), the client could have malpractice arising from that lack of knowledge and the resultant error.
Fails to Communicate and the Legal Ramifications
As has been the opinion in many circles, communication is the one of the most important factors which effect the probability of an attorney/client succeeded in their transactions. Attorneys are obliged to communicate honestly with their clients and the courts of law in which they represent their clients. Failing to uphold commitments, such as appointments or trial dates are grounds for a legal malpractice case.
Communication with a client also includes keeping a client informed about the status of their case. Lawyers tend to be busy and they fall into the trap of putting off meetings, telephone calls and personal appearances. This is actually the No. 1 reason clients sue their attorneys for legal malpractice. The American Bar Association’s Model Rules of Professional Conduct require lawyers to: 1. Keep their clients advised of the status of their case and 2. Promptly comply with reasonable requests from the client for information. In one Seattle case, a woman signed a 30-page settlement document regarding an employment matter that she was involved in. The attorney who represented the women withheld two of the pages from her. The woman was then denied certain benefits for which she believed she was entitled , because the employer stated that she had received the negotiated deal. The woman sued her attorney for legal malpractice. She was awarded $3.5 million in damages. A failure of communication does not have to be an accident. Lawyers may knowingly fail to notify their clients of a court date out of a fear that their client will not show up to court or trial. This failure can result in a default judgment against the client or a dismissal. Failure to reply to a court ruling in a response which is not favorable to the client can result in a loss which could be appealed or negotiated. Not responding to a discovery request is another failure of communication that can result in serious consequences for both the involved parties as well as the attorneys. If reasonable discovery requests are ignored by any party, an aggrieved party can ask the judges to infer that the discovery would have favored the other party. A party can move the court to sanction the defaulting party for failing to comply with a discovery order. What this means is that the court can impose almost any sanction to ensure that the party who failed to provide discovery complies with an order to provide all of the discovery requested. Communications from counsel to client are also important. There have been many lawsuits that have been filed against attorneys claiming that they failed to communicate the risk of pursuing litigation to their client. Attorneys are required to communicated the likelihood of success in a case to their clients. Failure to explain the dangers of litigation to the client may result in legal malpractice if a client loses a case.
Ethics Violations of Legal Malpractice
Legal malpractice claims can – and often do – arise over alleged ethical violations of the attorney. An attorney’s first responsibility is to the client, and the most fundamental of all ethical obligations is loyalty. The American Bar Association’s Model Rules of Professional Conduct (Rule 1.7) places attorneys under the duty not to take on representations that create a conflict of interest with current clients. Likewise, an attorney’s Rule 1.9 duties to former clients prohibits them from using any information gained from a former representation against the former client. Ethics aside, having the idea that you can leverage the confidentiality of the attorney-client relationship by putting yourself in a position to take advantage of a former client’s position is about the most underhanded thing any attorney can do, and unfortunately this sort of conduct does happen from time to time.
Other ethical violations that may lead to legal malpractice claims include:
The maintenance of adequate client trust accounts for your client’s funds;
Civil conspiracy with other parties to engage in fraudulent conduct;
Subornation of perjured testimony or falsification of any evidence or client testimony;
Confidentiality violations in revealing client secrets which you are privy to as attorney; and
The failure to adequately supervise assistants and/or other attorneys.
An ethical breach does not itself create a legal malpractice cause of action against the attorney; however, it can shore up a legal malpractice claim against an attorney when the ethical breach also has resulted in the attorney causing actual harm to the client. Many lay people have a hard time believing that an ethical violation does not automatically create a viable legal malpractice claim against the attorney – and to a certain degree they are right. On a larger horizon, public exposure of the attorney malpractice will almost always result in injury to the attorney’s reputation and possibly business.
What to Do if you Suspect Malpractice
If you suspect you have been a victim of legal malpractice, there are some steps you must immediately take. Ms. Green, the injured client must secure a second opinion to determine whether the negligence was harmful and constitutes legal malpractice. Without that second opinion no case can be mounted. Second, Ms. Green should begin gathering her evidence. The complaint, the retainer agreement, and subsequent correspondence with her attorney would be a good start. She must then file a complaint against her attorney with the grievance committee. Failing to file a complaint will effect recovery under the statute of limitations. Ms. Green, the client, has in essence three years to file a complaint to toll the period of limitation on the malpractice action itself.
Punishments for Attorneys in Malpractice
Consequences for Lawyers Found Guilt of Legal Malpractice
When a lawyer is found guilty of legal malpractice, the stakes can be substantial. The potential disciplinary actions against attorneys typically include censure, suspension, or disbarment, depending on the severity of the malpractice. Censure is a formal reprimand that does not affect the attorney’s ability to practice law but serves to warn and educate. Suspension may range from a short period to several years, in which the attorney is prohibited from practicing law. Disbarment is the most severe penalty, where the attorney’s license to practice law is revoked permanently or for a set period, effectively ending his or her career . Beyond disciplinary actions, the financial implications can be significant. In malpractice cases, lawyers can face reimbursement orders to return attorneys’ fees and pay damages to the victims. These payments can reach hundreds of thousands or even millions of dollars, depending on the extent of harm to the client. Finally, an attorney found guilty of malpractice can also face criminal charges, especially if there was a willful neglect of duty or fraudulent activity involved. Criminal penalties can include fines and even imprisonment.