Allegations Involving Legal Malpractice and Breach of Fiduciary Duty
Professional Liability Insurance columnist Sue C. Jacobs writes: Courts recently have been more liberal in holding that causes of action for both legal malpractice and breach of fiduciary duties may exist in the same action. The courts assume a fiduciary duty between attorney and client but look at the timing of the alleged offending actions and the sources of damages to determine if they are distinct from the damages allegedly sustained for the legal malpractice.
June 13, 2017 at 02:03 PM
29 minute read
As we have previously discussed, when the attorney client relationship does not end well litigation frequently ensues. The retainer agreement will generally provide that the client remains responsible for all reasonable legal fees and expenses incurred to the date the relationship is terminated.
The client may commence an action against her former law firm alleging legal malpractice, or in response to an action for outstanding legal fees she may assert counterclaims alleging among other causes of action: (1) legal malpractice; (2) breach of fiduciary duty; (3) aiding and abetting breach of fiduciary duty; and (4) breach of contract. The validity of the causes of action is generally tested in motions to dismiss and/or for summary judgment. In order to survive the motions, distinct damages arising from separate facts must be alleged and exist between the various causes of action based on negligence and those based on intentional acts. If the allegations in the different causes of action stem from the same or similar facts and do not specify distinct sets of damages, courts will hold the causes of action are duplicative and dismiss all but one, usually the malpractice claim. The breach of contract cause of action is rarely determined to be independent of the malpractice claim.
The Different Causes of Action
In order to successfully claim both legal malpractice and breach of fiduciary duty claims there must be allegations of different facts and different damages. Another significant difference is the timing of the offending actions. The alleged malpractice arises or occurs during the time the lawyer or law firm represented the client. The fiduciary causes of action may arise from activities after the retention was completed or terminated.
In a malpractice action the client must establish that the attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession and that the breach of the duty proximately caused the client to sustain actual ascertainable damages. The client must also establish that “but for” the attorney's negligence she would have prevailed in the underlying action.
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