MALPRACTICE PRACTICE GUIDE

Negligence and Breach of Contract

Attorneys are liable to their clients for injuries caused by malpractice. The most common theories of liability in malpractice cases are negligence and breach of contract. In some jurisdictions the distinction between the two theories is relevant for purposes of determining the applicable statute of limitations or the appropriate measure of damages, but otherwise there is no material difference between them. All courts appear to agree that no matter whether the action is based in tort or contract, to establish a prima facie case of malpractice a plaintiff must prove:

• The existence of an attorney-client relationship giving rise to a duty owed on behalf of the attorney to the client'
• An act or omission by the attorney in breach of the duty owed;
• Injury suffered by the client; and
• A "proximate cause" relationship between the attorney's breach of duty and the injury suffered by the client.

Duty

An attorney owes a duty to his client to be competent and diligent. To be competent, an attorney must posses a certain minimum amount of legal knowledge, skill, and judgment. To be diligent, an attorney must use that legal knowledge, skill, and judgment zealously and faithfully on behalf of the client.

The duty runs to all things within the scope of the attorney's undertaking on behalf of the client. Since the attorney-client relationship is consensual in nature, however, an attorney may choose to undertake only certain matters on behalf of a client. In such a case, an attorney owes no duty to the client with respect to matters the attorney has not agreed to handle, but the attorney may have a duty to alert the client to the existence of other legal problems the client may not recognize.

Breach

There are slight variations from jurisdiction to jurisdiction in the formulation of the standard used to determine whether there is a breach of duty. Essentially, an attorney's conduct is measured against the standard of an attorney who possesses and exercises with reasonable diligence that degree of knowledge, skill, and prudence commonly possessed and exercised by similarly situated attorneys.

Expert testimony is required to establish a breach of the standard unless the breach is so clear and obvious as to be within the ken of laymen, such as when an attorney fails to file suit before the statute of limitations runs out.

A breach of duty is not necessarily established by the fact that an attorney has been disciplined by bar authorities in connection with a client's ease. The disciplinary rules are intended to protect the bench and bar as well as the public from the ills of unethical conduct. Some rules do not reflect a duty owed to a client. Accordingly, not every breach of a disciplinary rule will give rise to a case of malpractice under the doctrine of negligence per se.

Nor is a breach of duty established by the mere fact that a client's case is lost. The nature of the adversarial system is that in the competition between opposing parties, someone will lose. Therefore, the doctrine of res ipsa loquitur is inapplicable in malpractice cases.

An actionable breach of duty by an attorney requires something more than an honest mistake. While an attorney must be competent, no attorney is expected to know the law so well as to be able to offer an infallible opinion on an obscure point on a moment's notice, such as in the middle of a trial. Nor is an attorney required to be correct in forming an opinion on an unsettled point of law as to which well-informed attorneys might differ. But every attorney is expected to be able to research the law and form a correct opinion on points that have been settled long enough to come to the notice of the profession, and to recognize and avoid as much as possible the risks of pursuing a course of action that involves an unsettled area of the law.

Likewise, a breach of duty is more than a mere error in judgment. The law is an inexact science and often it presents choices between alternative courses of action. Particularly in litigation, an attorney faces difficult tactical and strategic decisions and the risk-benefit analysis involved is often subtle. Second-guessing is rarely allowed, and then only when the choice is clearly one between an accepted and traditional approach, on the one hand, and a new and risky method on the other.

Injury

All jurisdictions require a showing of injury by an aggrieved client, but there is a split of authority on what degree of injury is necessary.

The majority view is that the injury must constitute actual, present damage to the client's interests. Nominal damages or the mere threat of future harm will not suffice. This view recognizes that the essence of a malpractice case is to seek a private civil remedy for harm wrongfully inflicted on a client, and not simply to vindicate merely theoretical rights.

The minority view, on the other hand, requires only a showing of nominal damages. It holds that the attorney-client relationship is essentially contractual in nature. An attorney impliedly contracts with a client to conform to the prescribed standard of care in handling the client's affairs. Thus, a client technically suffers at least nominal damages when an attorney breaches the duty implied under the contract.

The main significance of the distinction between the majority and minority views is the effect it has on applying the statute of limitation. In jurisdictions following the majority view, a client's cause of action accrues either when actual injury is suffered or else when it is or should have been discovered. In minority jurisdictions, however, a client's cause of action accrues when the breach of duty occurs.

The amount of damages recoverable against an attorney guilty of actionable misconduct is governed by the rules prevailing generally in that jurisdiction. An attorney is always liable for direct damages suffered by the injured client, and these are measured by the extent of the benefit lost and detriment incurred. An attorney is usually liable for foreseeable consequential damages as well. But recovery for special damages such as attorney's fees expended to prosecute a malpractice action, or for exemplary or punitive damages, varies from state to state. Here the distinction between tort and contract theories of recovery is significant. In many states, for example, punitive damages are allowed in tort cases, but not in contract cases.

Proximate Cause

Proof of a "proximate cause" relationship between an attorney's breach of duty and an injury suffered by a client requires a showing that "but for" the attorney's misconduct the injury would not have been suffered. Such a showing is more easily made in cases alleging a breach of duty in the preparation of documents or furnishing of advice than it is in the cases involving the mishandling of litigation. In the latter type of case, the burden is on the client to conduct a "trial within a trial" to show that had the attorney not breached the duty owed to the client, the result in the underlying litigation would have been different.

The "trial within a trial" phenomenon means that in a suit for mishandling of criminal litigation, for example, the burden is on the client to prove that he would have been found not guilty had his lawyer not been incompetent. Otherwise, the guilt of the client is held to be a superseding cause of the client's conviction and punishment. And, of course, in most states the doctrine of collateral estoppel prevents the defendant from relitigating the issue of guilt or innocence.

So too, when an aggrieved client alleges a cause of action was lost due to an attorney's failure to file suit within the statute of limitations, it must be shown that the client's underlying cause would have been successful if tried. This means the client has to prove the underlying claim even if the passage of time has caused the memories of witnesses to fade or evidence to be lost or destroyed - the very problems the statute of limitations is designed to prevent.

Moreover, where the injury alleged is the loss of a judgment that would have been recovered against an underlying defendant, the insolvency of the underlying defendant is held to be a superseding cause of loss and will absolve an attorney from liability. No liability attaches to the attorney since the judgment the client lost would have been uncollectible anyway. In some jurisdictions a client has to plead the solvency of the underlying defendant before the action against the attorney will even lie.