THE BASICS OF A LEGAL MALPRACTICE CLAIM
(AND RELATED CLAIMS)

INTRODUCTION:

The Lefkowitz Firm, LLC, welcomes you to its web site. The following information is intended to provide a basic outline of legal malpractice law. Claims for Breach of Fiduciary Duty by those in a position of trust (Lawyers, Business Partners, Trustees, Executors, etc.) may involve many similar issues relating to duty, breach, causation and damages, all as discussed below. It is hoped that this web site will be useful to current and prospective clients who may be interested in the basics of legal malpractice law.

Citations to case law have been omitted from the discussion below. The Lefkowitz Firm, LLC, cannot guarantee that case law and/or statutory law will not change, and therefore you should not rely on any statements found here (or those in any other web site) for legal advice. You should always confirm such information with your lawyer.

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ELEMENTS OF A CLAIM FOR LEGAL MALPRACTICE

A lawyer, like any other professional, is trained and certified to meet certain expectations of competency and skill. When a lawyer makes a serious error amounting to malpractice, willful or not, and the error results in a lost or weakened case (or the loss of some other legal right) a claim for legal malpractice may provide a remedy for the client.

As in most other states, Georgia law provides for a cause of action against an attorney for legal malpractice (also referred to as “legal negligence”). To prevail, the party bringing the claim must be able to prove the following elements: (1) an attorney-client relationship; (2) the failure of the attorney to exercise ordinary care, skill and diligence; and (3) damages proximately caused by that failure. The inability to prove any element of a claim will cause a case to be unsuccessful.

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THE ATTORNEY-CLIENT RELATIONSHIP

Generally, the existence of an attorney-client relationship is not disputed. Often there exists a written contract of employment, which can take the form of a simple contract, an engagement letter or some other written agreement setting forth the terms of the representation. An attorney-client relationship also can be created by oral agreement. Individuals who are not actually represented by an attorney, but who can show that they had a good faith basis for relying on the attorney, or individuals whose interests clearly were being protected by the attorney, even though not directly a client, also may be able to pursue a claim for legal malpractice. Consider, for instance, the drafting of a will. Generally, if an error is made, it will not come to light, and damages will not be suffered, until the testator (the person who is bequeathing the assets) is dead. In this type of situation, the Courts have held that the estate of the deceased may have a claim, as the attorney knew that it was the estate that would suffer if the will contained errors. Most legal malpractice claims concern a clear attorney-client relationship, and if there is a dispute regarding whether a valid claim exists, it might relate to whether the particular task that was performed incorrectly was actually within the scope of the attorney’s representation.

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FAILURE OF THE ATTORNEY TO EXERCISE ORDINARY CARE, SKILL AND DILIGENCE

In order to recover against an attorney for professional malpractice, the plaintiff must establish a deviation from the applicable standard of care. The Georgia Supreme Court has set forth the standard of care against which an attorney's conduct is to be measured in a legal malpractice action:

An attorney's duty is to use such skill, prudence, and diligence as lawyers of ordinary skill and capacity commonly possess and exercise in the performance of tasks which they undertake.... An attorney is not bound to extraordinary diligence. He is bound to reasonable skill and diligence, and the skill has reference to the character of the business he undertakes to do....

A bad or adverse result for the client does not necessarily mean that an attorney breached the applicable standard of care. For example, the Georgia Supreme Court has held that a defendant attorney's failure to appear at a calendar call did not fall below the standard of care, despite the fact that a default judgment was entered against his client, because the defendant attorney did not receive reasonable notice from the trial court. Of course, without the bad result, there can be no claim for legal malpractice. The Georgia Supreme Court has made it clear that an adverse result is a condition precedent to an action for legal malpractice. The bad or adverse result is discussed in more detail below, as it is often the most important aspect of a claim.

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ETHICAL RULES

A violation of the ethics rules, standing alone, cannot serve a legal basis to support a civil action for legal malpractice. The comments under Rule 1.1 of the Georgia Rules of Professional Conduct, state, “The purpose of these rules is not to give rise to a cause of action nor to create a presumption that a legal duty has been breached. These Rules are designed to provide guidance to lawyers and to provide a structure for regulating conduct through disciplinary agencies. They are not designed to be a basis for civil liability.”

However, the violation of a Rule of Professional Conduct IS admissible in a trial for legal malpractice, as additional evidence of a lawyer’s wrongdoing.

Note: Prior to January 1, 2001, Georgia’s lawyers were obligated to follow Professional Standards:

Ethical rules prior to January 1st 2001.

The Georgia Rules of Professional Conduct went into effect on January 1, 2001. These rules are based on the ABA Model Rules:

Ethical rules effective as of January 1st 2001.

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THE EXPERT WITNESS AND THE AFFIDAVIT REQUIREMENT

Experts are generally required to explain to the jury the professed "standard of care" or level of acceptable practice and whether the mistake that hurt the client was a deviation from that norm. Georgia law requires that a complaint (the lawsuit) for professional negligence (legal malpractice, medical malpractice, etc.) be accompanied by an affidavit from an expert specifying at least one negligent act and the facts upon which the opinion by the expert is based. Expert testimony also is required at the trial of the case. While the expert witness affidavit which is filed with the Complaint only need state one act of negligence, at trial, the expert must testify as to the act of negligence and whether said negligence/malpractice caused damages.

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PROXIMATE CAUSE OF DAMAGE

In order to recover on a claim for legal malpractice, the alleged breach of duty by the lawyer must have been the cause of damages suffered by the client. In cases where the loss was not the result of the lawyer's action, a legal malpractice defendant will not be held liable. This is usually the most difficult element of a legal malpractice claim.

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THE UNDERLYING ACTION

A major issue relating to the validity of a malpractice action concerns the viability of the claim that gave rise to the legal malpractice suit. For instance, if a person injured in a car accident hires an attorney to pursue the claim, and the attorney allows the two-year statute of limitations to expire, the client must prove not only that the two-year deadline was missed (and that missing the deadline was negligence) but that the client would have recovered damages in the car accident law suit had it been filed on time. A legal malpractice plaintiff often must prove two cases in one. The underlying car accident case is a “case within a case.”

If a client has a pending claim and is dissatisfied with the legal services she is receiving, the client may not merely drop the pending claim and pursue a claim against a lawyer. Courts hold that “where the underlying action remains pending, plaintiff can prove no injury because the action may terminate favorably to the client.” What happens if a party has lost in the trial court and an appeal is pending? May the client dismiss or settle the underlying case and then sue the lawyer for the amounts which he was unable to recover? The Georgia Supreme Court has held that appeal rights must be pursued, if they are likely to prevail. “The plaintiff abandons its malpractice claim when it settles the underlying litigation while the appeal (or post-judgment motion) is pending, if the appeal or motion, would, in all likelihood, have resulted in a reversal of the judgment.”

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BUT FOR THE NEGLIGENCE...

Georgia courts focus on whether the client would have been able to obtain a favorable resolution but for the attorney's negligence. Proximate cause will not be found to exist where the link between the defendant attorney's breach of the standard of care and the plaintiff's damages are speculative.

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WHY IS CAUSATION SO IMPORTANT?

As noted above, proving that the attorney made an error is usually the less challenging part of a legal malpractice case. The challenge is proving that the mistake actually caused the client to suffer damages. If a lawyer misses a deadline to file a case or file an appeal, the client must prove that the case (or the appeal) likely would have been successful. It's not enough to simply prove that the deadline was missed.

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COLLECTIBILITY OF THE UNDERLYING JUDGMENT

To satisfy the proximate cause requirement, not only must the plaintiff show that he would have prevailed in the underlying case, but the plaintiff must also show that he could have collected a judgment on the claim. The court has summarized the law as follows:

An action for the negligence of the attorney in the unskillful conduct and management of litigation is for the value of the claim lost through such negligence. The claim must be valid, and every fact essential to its validity must appear, and it must further appear that the party against whom the claim was asserted was solvent....A client suing his attorney for malpractice not only must prove that his claim was valid and would have resulted in a judgment in his favor, but also that said judgment would have been collectible in some amount, for therein lies the measures of his damages.

Based upon this law, in a legal malpractice action, the plaintiff/client must prevail in two distinct items. First, the client suing his attorney for malpractice (arising out of the hypothetical car accident case) must prove that the underlying claim was valid and would have resulted in a judgment in his favor. Second, the plaintiff/client must prove that the judgment would have been collectable in some amount, i.e., that the defendant was solvent (or had adequate insurance to pay the claim). Solvency of the underlying defendant is based upon the original defendant's ability to pay a judgment, had one been rendered against him.

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DAMAGES

A claim for legal malpractice will not be successful unless the former client can prove that damages resulted from the alleged breach of duty. Proving that the lawyer made a mistake is not enough. The absence of an adverse result will insulate an attorney from a claim for malpractice. For instance, if a lawyer misses a deadline to pursue a claim for monetary damages, the former client must prove what those damages would have been. This is an extension of the concept that legal malpractice claims are often a “case within a case.”

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BREACH OF FIDUCIARY DUTY

A lawyer also may be held liable for breach of fiduciary duty. The Georgia courts have drawn a distinction between breach of fiduciary duty and legal malpractice. For instance, in Tante v. Herring, 264 Ga. 694 (1994), the client and her husband sued their former attorney for legal malpractice, breach of fiduciary duty and breach of contract. They claimed that the attorney, after reviewing the client’s psychological evaluations, took advantage of the client’s impairment of judgment and difficulty with interpersonal relationships by initiating and maintaining a two-year sexual relationship and giving her a venereal disease. The client had prevailed in the divorce action being handled by her lawyer. The Supreme Court of Georgia held that the claim for legal malpractice should have been dismissed, because the client won her claim for which the attorney was providing representation. However, the court permitted the client to pursue the breach of fiduciary duty claim.

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LEGAL MALPRACTICE INSURANCE

There are well more than a million lawyers practicing across the United States, and it is estimated that only 60 percent have malpractice insurance. Unlike physicians who often are required to have insurance if they have hospital privileges, lawyers are not required to have insurance. In addition, lawyers who have no insurance are under no obligation to disclose the lack of it to clients (unless specifically asked, in which case the lawyer would be ethically bound to disclose the fact that he is uninsured). Further, even if a lawyer does have insurance, his/her policy likely will not cover fraud, theft, or any other intentional act.

Clients who have suffered damages at the hands of their lawyers may have no practical recourse when the lawyer has no malpractice insurance, unless the lawyer has assets in his/her name from which a client may collect a judgment. Even though it may be uncomfortable, the client should ask his/her lawyer at the beginning of the relationship if he has malpractice insurance and the amount of the coverage.

If there is insurance coverage when the client files suit, typically two things will happen: (a) the insurance company will assign a law firm to defend the client's former lawyer against the claims, and (b) the insurance company will allocate money to pay the client if the accused lawyer and insurer decide to settle or lose at trial. The insurance company will pay no more than the limits of the lawyer’s insurance coverage. In addition, under some insurance policies, the costs of defense (legal fees and expenses) will reduce, dollar-for-dollar, the amount of coverage.

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CLAIMS MADE INSURANCE

An attorney’s errors and omissions insurance coverage is almost always provided under a “claims made policy.” This type of coverage is different than typical liability insurance. By way of example, consider the hypothetical car accident claim. If someone caused an accident on June 30, 2006, the insurance policy that was in effect at the time of the accident would cover the claim. Therefore, even if the driver of the car subsequently loses her insurance, or fails to renew her coverage, the injured person will still have insurance available to pursue, because the policy which was in effect on June 30, 2006 will cover the claim. However, under a claims made policy, the insurance policy which is in effect at the time the claim is made is what will control. Therefore, if a lawyer commits legal malpractice in 2006, but the client does not assert a claim (or the attorney does not report the potential claim) until 2008, the 2008 policy will cover the claim. If the lawyer has cancelled his insurance during the period between the date of the error and the date the claim is asserted, there may be no insurance to cover the claim. Even though the deadline (statute of limitations) to bring a legal malpractice claim may be a few years, if a client is aware of an error, a claim should be asserted as promptly as practicable, because of the risk that insurance coverage may not be available in future years.

WHAT DEFENSES SHOULD YOU EXPECT IN A MALPRACTICE CLAIM?

When considering whether you have a claim which can be successfully pursued, you should contemplate the defenses which may be asserted. Below are some of the most common defenses asserted by lawyers:

"You filed your lawsuit too late”

Every state has a deadline within which you must file a legal malpractice claim. This time limit is referred to as the “statute of limitations.” The deadlines are different from state-to-state. For instance, in some states the deadline is 2 years, but does not start to run until you knew, or reasonably should have known, that your lawyer committed legal malpractice. In other states, the deadline does not start to run until the attorney-client relationship ends. In a few states, the deadline does not start to run until the underlying case is concluded. Georgia’s deadline for filing a legal malpractice claim generally is 4 years. The law as to WHEN that four years begins to run is complicated, and you should contact an attorney for advice regarding the specific facts of your claim.

"The attorney did not represent you”

Generally, you must have had an attorney-client relationship with an attorney, or you cannot sue him for his errors. There are occasional exceptions, but the basic rule is that an attorney owes a duty to his client and not to other people who might be harmed by the poor legal advice. Exceptions to the general rule usually involve situations in which the attorney should have known that any error would harm someone who is not a client. Such an example would include beneficiaries to a will which was improperly drafted. In that instance, the attorney represented the individual for whom he was drafting the will, but the attorney should have known that any errors in the drafting would affect the heirs.

"This was not part of my representation”

Suppose you hire a lawyer to help you in the purchase a restaurant, and you pay the lawyer to draft the transactional documents. After the purchase, you find out that the restaurant has lost its liquor license, and therefore, you cannot operate the restaurant profitably. You want to pursue a claim against your lawyer for failing to advise you of the status of the liquor license. Your lawyer will likely contend that he was only retained to handle the closing of the transaction, and any due diligence regarding the liquor license was your responsibility, not his. The success or failure of this type of defense will depend on the specific facts of your case, the length of time you have had an attorney-client relationship, the sophistication of the client and other factors.

"You cannot prove proximate cause”

In a legal malpractice claim, you must prove that the lawyer's error was the cause of your damages. Often the most difficult part of a case is proving the causal relationship between the error and your alleged damages. The classic example of this defense arises out of a personal injury case. Suppose your lawyer filed your lawsuit too late, and as a result, it was dismissed. Proving that the lawyer made the mistake is easy; he missed the deadline. Proving that the mistake caused damages requires that you prove you would have won the personal injury case had it been filed on time (and prove how much money you would have won). It is not uncommon for a lawyer who filed a lawsuit to later claim, in his defense, that the lawsuit was unwinnable, and thus the client is not entitled to recover in the legal malpractice claim.

"You had more to do with the bad result than I did”

With this defense, also referred to as “contributory negligence,” the lawyer contends that even if she was negligent, and you suffered damages because of it, you also did something to contribute to the bad result, and you, rather then your lawyer, should be held responsible. This defense is often asserted when the claim arises out of an improperly drafted document. The lawyer will assert that the client read the document and could have caught the error himself. This defense, of course, ignores the fact that the client hired the lawyer to ensure that the documents were drafted properly and to protect the client's interests.

"You would have suffered the same damages even if the lawyer had not been negligent."

When a lawyer asserts this defense, he is arguing that no matter how competent your lawyer had been, you would have lost the underlying case anyway. If the lawyer can prove that his error did not make a difference in the outcome, then you will have failed to prove his error was the cause of your loss.

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IS THERE A DEADLINE FOR ME TO SUE MY LAWYER?

There is a time limit, and if you do not file your malpractice suit in court by that date, you are forever barred from doing so. As noted above, Georgia’s deadline (the “statute of limitations”) for filing a legal malpractice claim generally is 4 years. Insurance companies and defense attorneys often contend that the statute of limitations begins to run the moment the error occurs. While there are a few Georgia Court of Appeals cases which support this assertion, there also are statutes and appellate rulings which directly contradict that position. The bottom line is that the law as to WHEN the four years begins to run is complicated, and you should contact an attorney for advice regarding the specific facts of your claim.

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WILL THE LAWYER’S INSURANCE COVER MY CLAIM?

No matter how strong your malpractice claim may be, it will have little chance of providing the compensation you deserve if your former lawyer somehow does something that destroys his malpractice insurance coverage. For instance, legal malpractice insurance policies (also called “Errors and Omissions” policies) run from year to year. The fine print on the policy usually says that if the lawyer has any reason to believe he might have committed any malpractice during the previous year, or any reason to believe a claim might be brought against him, he must tell his insurer about it when he fills out his renewal application. This latter scenario may include situations where you have verbally or in writing blamed the attorney for something that happened in the case, even if you were merely venting. If your lawyer does not tell his insurer about such matters at policy renewal time, and you make your formal claim after that, the insurer can refuse to cover the claim. Regrettably, the person who is harmed is the client.

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Email: dnl@lefkowitzfirm.com

Atlanta Office
170 Mitchell Street
Atlanta, Georgia 30303
Phone: 404.658.5000
Fax: 404.658.5004

Athens Office
648 South Milledge Avenue
Athens, Georgia 30605
Phone: 706.850.8383
Fax: 706.850.8388