Legal Malpractice Law In Usa : Financial Services

When the patient is injured by the negligence of doctor, doctor bears the legal responsibility. When the driver of car rash and negligently drives a car and causes the death of person, a driver bears the responsibility. When the building collapses as the poor construction work of contractor or engineer, an engineer or contractor bears the responsibility.

Similarly, the laws related to legal malpractice in USA are made to compensate the clients by Attorneys.

An attorney is always the defendant in legal malpractice case. Legal malpractice is an act of attorney which causes harm to the client when the attorney breaches his fiduciary or contractual duty towards a client.

It is also become common in USA that when attorneys sue clients for attorneys? fees, many clients assert malpractice as a defense.

Although both the term refers to an act towards the client, there is quite difference between the both. It is the right of an every individual to represent them before the court. When the person represents others, it requires proper education, training and an experience. A lawyer needs to act / practice within the scope/ definition of practice of law[1]. When he breaches such duty it amounts to unauthorized practice of law. E.g. practice of law by Californian attorney in New York without the license from the bar council of New York.

While the Professional responsibility?encompasses the duties of?attorneys?to act in a professional manner, obey the law, avoid?conflicts of interest, and put the interests of clients ahead of their own interests[2]. Legal malpractice occurs when there is a breach of professional responsibility towards the client

An attorney is not said to made legal malpractice by outsourcing legal process to outside providers. However the law requires that client has the information about his work being outsourced to the LPO providers, and there shall be supervision by an attorney towards the work performed by LPO providers. There is also an opinions of American Bar council and many bar council of the states as to the outsourcing the legal process and have opined that there is no unethical practice involved in outsourcing legal process to LPO providers.

Most of the civil laws of the states in USA govern the law related to the Legal malpractice. Federal law is also applicable when it relates to a federal question. Besides the judge made law, ruling, decisions and opinions on the cases will govern the Legal malpractice cases.

An attorney also subjected to the criminal law if he commits fraud/ theft on the client account.

Ethics of the bar council of the state also govern in initiating the disciplinary proceeding against an attorney.

Generally cases are brought before the state courts where the case was filed / where the attorney represented the client and the breach is occurred. However, case is also filed in federal district courts when it involves the federal question. Federal Courts would be having exclusive jurisdiction over the legal malpractice case when itrequires the resolution of a substantial question of federal patent law[3]. But it is still unclear about the jurisdiction of by state or federal courts when the cases arise form IP matters[4].

There is also an issue as to filing legal malpractice cases against the lawyers from other state. Case is particularly filed in the state where the attorney represented the client and in the state where the attorney has license to practice.

Every 4 to 5 law professional out of hundred have to face a lawsuit in a year[5]. Each year, over 35,000 lawsuits are filed against insured lawyers for legal malpractice.?Figure would be more if included uninsured lawyers[6].

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Statutory limits for filing legal malpractice suit against the Lawyers varies from 1 to 4 years. It is 2years in Alabama, Alaska, and Arizona. In Nevada 4 years or 2 years from discovery, whichever occurs earlier.

In Louisiana State, case shall be brought unless filed in a court of competent jurisdiction and proper venue within one year from the date of the alleged act, omission, or neglect, or within one year from the date that the alleged act, omission, or neglect is discovered or should have been discovered[8]

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In New York State, three years from the date of the legal malpractice or from the date until the attorney stops representing the client in that matter[9]. (NY CPLR ? 214(6),)If it is against the minor if the victim is a child under 18 years old, his or her statute of limitations does not even start to run until he or she is 18, so normally it would expire on his or her 21st birthday[10]. In?New Jersey, a lawsuit must be filed within six years of when the malpractice occurred[11].

In Pennsylvania, legal malpractice claim must be brought within 2 years from the date the plaintiff should have reasonably learned about the malpractice.

In Texas, the general rule is that legal malpractice cases must be brought within two years from the time the injured party knew or should have known of the legal malpractice[13].?Likewise different states have adopted different types of statutes of limitations and the beginning of limitation period and certain exceptions to the limitations etc.

When the client assigns his case to an attorney, he is expected to act prudently and within the contract with the attorney. How can a client tolerate with the injury caused by an attorney to a client? There are laws in USA to address these remedies; a client injured in a legal malpractice case can file a civil law suit against the attorney in the competent court of the state to recover damages. An attorney also subjected to criminal prosecution when he commits a fraud or theft on the money or the property entrusted with the attorney. A client can also bring the act of legal malpractice to the notice of disciplinary committee of the bar council of particular state where the bar council imposes sanctions including disbarment or the payment of fine to state bar association.

A lawyer has the duty, in all dealings and relations with a client, to act with honesty, good faith, fairness, integrity, and fidelity. A lawyer must possess the legal skill and knowledge that is ordinarily possessed by members of the profession.

Once the lawyer and the client terminate their relationship, a lawyer is not allowed to acquire an interest that is adverse to a client, in the event that this might constitute a breach of the Attorney-Client Privilege. In addition, a lawyer cannot use information that he obtained from a client as a result of their relationship.

Every state in USA has adopted its own ground for claiming Legal malpractice. In general, legal malpractice may arises from

Existence of professional duty to the person harmed.
Professional negligence (violation of a duty owed to the client);
Missing of deadlines for filing of suit within time limit law required by statute.
negligent errors,
negligence in the professional relationship,
fee disputes,
Breach of duty towards the client to provide with a detailed and accurate account of money or the property handled. Mishandling of client money.
Failure to show cost involved in court fees and other reasonable expenses from the money advanced to an attorney.
Fee-splitting arrangements with non-attorneys.

10. Any types of error that would have been avoided by a lawyer

Disclosure of confidential information.
Giving improper advise

13. Preparing the documents improperly

14. Failure to file a documents

15. Making faulty analysis in examining the title to the real estate

16. injury caused to a third party

17. Breach of Fiduciary Duty

18. Conflicts of Interest e.g same lawyer or firm representing both the sides in law suit.

19. Failure to Properly Investigate & Perform Discovery

20. Errors During Trial

21. Improper Settlement

22. Improper Documentation

23. Accounting Malpractice

24. Probate & Estate Planning Legal Malpractice

Failure to meet court deadlines.
Failure to act within the statute of limitations.
Failure to return phone calls or communicate with a client.
Failure to resolve conflicts of interest.
Failure to know the law or perform adequate research.
Abuse or misuse of a client?s trust account, including commingling trust account funds with the attorney?s personal account.
Improper withdrawal from representation.

32. Failure to file a lawsuit or motion in time

33. Overbilling

34. Failure to obtain client?s consent before agreeing to a settlement / plea bargain

35. Failure to discuss a settlement offer with client

36. Failure to file a case before the statute of limitation expires

37. Making mistakes in drafting contracts, wills, trusts, and other legal documents

38. Failure to present relevant evidence at trial

Filing a legal malpractice suit is not an easier one; a plaintiff needs to establish certain things against the lawyer. There is a burden on the plaintiff to show cause that there are prima facie grounds against the lawyer to prove legal malpractice. Burden of proof also may vary defending on the law of the state. In general plaintiff needs to show?following Prima facie elements

1. must establish that there is an attorney and client relationship.: an attorney client relationship can arise by either express agreement or by implication from the parties actions.

2. Must prove the breach of duty toward the client (breach of contract/ violation of standard of care) e.g. Not representing client properly, not filing documents in time, misusing the money and property entrusted with the lawyer.

3. That the negligence was a proximate cause of an injury: A plaintiff needs to show that the negligent act of the defendant was the proximate cause (and not some other reason) of the damages to the plaintiff (person filing the lawsuit).

4. Must prove that the client was injured due to the malpractice. If there is no injury, then there is no ground for proving the case case.

5. Damage: Plaintiff shall prove the damages actually suffered and the nature and amount of the damages suffered. Even if all other elements are proved and the damage is not proved the case is likely to be dismissed.

Error due to an issue of law was unsettled or debatable.
The ??Attorney Judgment Rule?: under this rule a lawyer is not liable for small errors in the judgments where the attorney made those judgments in good faith
Changes in the law?? A lawyer shall not be made responsible for wrong advice, merely because the attorney?s advice or representation turns out to be faulty based upon subsequent?changes in the law.
The ?Case within a case?(suit within a suit)- this involves a retrial of the original litigation within the context of the subsequent malpractice action ? a case within a case.
attorney-Client Privilege?- In defending against an accusation of malpractice, a lawyer may be permitted to use what were formerly privileged communications from the plaintiff in order to respond to plaintiff?s accusations.
Proximate Cause: attorney?s negligence did not proximately cause[14] of his client?s claimed damage. An attorney take defense as to his negligence was not the proximate cause of the damage to the plaintiff.

In one of the case, anattorney had made a mistake in the legal description of land encumbered by a mortgage that he was retained to foreclose which delayed the sale of the property, giving the mortgagor time to raise the money required to redeem. The attorney?s client sued him for malpractice, seeking to recover the loss of the increased value of the property. A jury awarded the client ,000 in damages. On appeal, the reviewing court stated that the attorney?s negligence, if any, could not be a proximate cause of the client?s loss.

Similarly failure to obtain expert witness, failure to submit affidavit, failure to join parties in litigation, failure to file a complaint, late filing of answers to request for admissions, failure to adequately investigate party?s assets and insurance coverage, failure to inform client of dismissal of case, failure to prevail on a meritless defense, failure to uncover evidence in suit on option contract, failure to move for judgment n.o.v., failure to inform bankruptcy judge of bid for bankrupt estate, failure to submit affidavit prepared by client, failure to ?adequately? represent client, failure to invoke a statutory defense, failure to prevent client?s suicide, failure to identify all of spouse?s assets, failure to move for default, and failure to inform client of settlement offer would not always be ground for legal malpractice unless there is a proximate cause of the Attorney[15].

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[1] the??involves giving?legal advice?to clients, drafting legal documents for clients, and representing clients in legal?negotiations?and?court?proceedings such as?lawsuits,

Sadanand Naik is a Law graduate from Mangalore University (2005), in Karnataka, India, and Upon graduation, Mr.Sadanand Naik served as a Assistant Lawyer for the Rajan D.Naik, Advocate Vasco-Da-Gama, Goa in India. Mr. Sadanand Naik then served as the Assistant Lawyer for the Advocate M.M.Jalisatgi,Honavar. Now he works as the Legal Associate for one of the Leading LPO in bangalore.

Source: http://www.thezman.net/2011/10/legal-malpractice-law-in-usa/

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