The term "legal malpractice" is loosely used, not only by the public but by attorneys as well. Generically, it conveys something wrong, boneheaded or contrary to the way things are usually done. It can sometimes mean that otherwise reputable work ended in a bad result.

When attorneys comment on the work of other attorneys, they often resort to an attorney malpractice scale. What they mean is that another attorney's work fell below the standard believed to be "good and acceptable." However, departure from good practice is just the start of the analysis.

"Departure" is only the first of four elements of legal malpractice and the easiest to discern. Human behavior is abundantly full of mistakes, hesitations, and wrong turns. Attorneys err for both human and institutional reasons. Human reasons for mistakes are obvious. Lack of sufficient knowledge, overwork, miscalculation, inattention, family crises, personal character flaws, substance abuse problems, physical problems all create mistakes.

Institutionally, attorneys over-book themselves in order to attempt to work to full capacity. Long delays between court dates or between litigation events require that multiple cases be worked on at the same time. For attorneys who practice in contingent fee areas, there is no guarantee of cash flow and a common practice is to file more cases than one might service at any given time. Large firms have to cultivate a pyramidal scheme of partners and associates, and those associates must be kept at work. So it goes.

This article will catalogue the four elements and sub-elements of legal malpractice as an attempted guide to the analysis of whether any particular legal outcome is legal malpractice and whether it can be successfully prosecuted.

Departures

In order to recover damages for legal malpractice, a plaintiff must demonstrate that the attorney "failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession." Rudolf v. Shayne, Dachs, Stanisci, Corker & Sauer, 8 N.Y.3d 438 (2007); Leder v. Spiegel, 9 N.Y.3d 836 (2007) The attorney's breach of this duty must proximately cause plaintiff to sustain actual damage, McCoy v. Feinman, 99 N.Y.2d 295 (2002) beyond which a plaintiff must show that he or she would have prevailed in the underlying action or would not have incurred any damages but for the lawyer's negligence" Davis v. Klein, 88 N.Y. 2d 1008 (1996) and finally that the events led to ascertainable damage.

Proximate Cause

The second element requires that the departure (more or less) directly led to a bad economic result. Plaintiff must plead and prove that the departures "from good and accepted practice were the proximate reason for the loss sustained." O'Callaghan v, Brunelle, 84 A.D.3d 581 (1st Dept. 2011). Another way of saying this is that plaintiff must demonstrate that he or she would have prevailed in the underlying action [or transaction] or would not have incurred any damages" except for negligence of the attorney. Hamoudeh v. Mandel, 62 A.D.3d 948 (2d Dept. 2009); Markowitz v. Kurzman Eisenberg, Corbin Lever & Goodman, 82 A.D.3d 719 (2d Dept. 2011). Overall, the departure need only be "a cause" of the outcome, not "the cause." Barnett v. Schwartz, 47 A.D.3d 197 (2d Dept. 2007)

Standing is a common issue in proximate cause analysis. One must have a right to sue the attorney for proximately caused damage. Privity of contract, no longer necessary in almost any other sphere of the law, is still required, with the tiny exception for "fraud, collusion, malice or other special circumstances." Ginsburg Dev. Cos. v. Carbone, 85 A.D.3d 1110 (2d Dept. 2011)

Proximate cause in a case against criminal defense attorneys is an exception. Proximate cause in a criminal defense case is arbitrarily defined as the guilty plea or conviction, not the legal representation. This is a policy decision by the courts. Carmel v. Lunney, 70 N.Y.2d 169 (1987) To state a cause of action for legal malpractice arising from negligent representation in a criminal proceeding, a plaintiff must be able to allege and demonstrate "actual innocence" (id.), typically by acquittal, reversal or exoneration.

A common example of lack of proximate cause occurs when the underlying claim was already barred by the statute of limitations before commencement even though the attorney's negligence was "clearly inexcusable." Dempster v, Liotti, 86 A.D.3d 169, 180 (2d Dept. 2011). Another example would be one in which it is clear that plaintiff was responsible for her own problem, such as failing to cancel a contract of sale. Bells v. Foster, 83 A.D.3d 836 (2d Dept. 2011). If the problem could not have been fixed by the attorney, there is no malpractice causation.

Other examples arise in the settlement of the underlying case. Rupert v. Gates & Adams PC, 83 A.D.3d 1393 (4th Dept. 2011). Plaintiff claimed shortcomings in divorce representation, which then was resolved in a global settlement that itself resolved a bankruptcy proceeding. "In doing so, plaintiff precluded pursuit of the very means by which defendants' representation of plaintiff in the matrimonial action could have been vindicated." Beyond the scope of this article is a line of matrimonial cases in which mere settlement (along with the rote allocution that the client was satisfied with the attorney's work) deprives them of a legal malpractice cause of action. Harvey v. Greenberg, 82 A.D.3d 683 (1st Dept. 2011); Weissman v. Kessler, 78 A.D.3d 465 (1st Dept. 2010); Katebi v. Fink, 51 A.D.3d 424 (1st Dept. 2008)

Nevertheless, the rule generally remains that a legal malpractice action remains viable if it alleged that the settlement of the action was effectively compelled by mistakes of counsel. Tortura v. Sullivan, Papain, Block McGrath Cannavo, 21 A.D.3d 1082 (2d Dept. 2005); Bernstein v. Oppenheim & Co., 160 A.D.2d 428, 430 (1st Dept. 1990)

Bankruptcy filings are often associated with legal cases gone wrong, and factor into the question of standing. Pre-petition assets of the debtor become property of the estate, and do not remain property of the debtor. A pre-petition legal malpractice lawsuit or cause of action becomes an asset of the estate. Failure to disclose a pre-petition legal malpractice cause of action in the schedules of a Bankruptcy petition deprives the plaintiff of the legal capacity (standing) to sue for legal malpractice later even if abandoned. It is the trustee, and only the trustee in bankruptcy who has that standing. Whelen v. Longo, 7 N.Y.3d 821 (2006)

Attorney fee awards may similarly deprive plaintiff of standing to bring the action or may be enunciated as "blocking" plaintiff from suing under res judicata. Mahler v. Campagna, 60 A.D.3d 1009 (2d Dept. 2009). The reasoning goes that legal fees may not be awarded in the face of legal malpractice and if legal fees are awarded, in arbitration (id.), or as a charging lien (Siegel v. Werner & Zaroff, PC, 270 A.D.2d 119 (1st Dept. 2000)), or as an application for fees in a bankruptcy matter (Breslin Realty Dev. Corp v. Shaw, 72 A.D.3d 258 (2d Dept. 2010)), or in other circumstances, then there could not have been malpractice, whether the issue was raised or not. Hence, when plaintiff sues for legal malpractice after an attorney fee has been awarded, the case is dismissible under res judicata or collateral estoppel. Kleinman v. Weissman Law Group, PC, 2018 NY Slip Op 7573.

'But For' Issues

The third element of legal malpractice is "but for," which has become the shorthand for the "case within a case." It is not completely clear where "proximate cause" ends and "but for" begins, but they are doctrinally different. Every negligence case requires "proximate cause" but only legal malpractice cases require "but for" causation.

This requirement is a distinctive "feature of legal malpractice actions arising from an attorney's alleged negligence in preparing or conducting litigation." It is additional to the element of proximate cause, requiring the jury to compare a hypothetically better outcome to the actual outcome before finding the attorney's liability in the litigation before it. McKenna v. Forsyth & Forsyth, 280 A.D.2d 79 (4th Dept. 2001). Failure to allege "but for" causation is sufficient to dismiss the case. Success, but for the negligence of counsel is the required proof. Waggoner v. Caruso, 14 N.Y.3d 874 (2010). Courts often determine that the allegations of a complaint are "speculative." As an example, in 180 E. 88th St. Apt. v. Law Off. of Robert Jay Gumenick, 84 A.D.3d 582 (1st Dept. 2011), the court found "in any event" that causation was "speculative and otherwise unsubstantiated by the record." Another example is Stackpole v. Cohen, Ehrlich & Frankel, 82 A.D.3d 609 (1st Dept. 2011), which discusses whether a doctor would not have purchased an apartment but for the attorney's negligence. The court reviewed testimony that the doctor became aware of the "horrors" of amending the certificate of occupancy several years earlier in an unrelated transaction such that she could not blame the attorneys for this particular outcome.

One particularly unique issue is the attorney judgment rule. Iocovello v. Weingrad & Weingrad, 4 A.D.3d 208 (1st Dept. 2004); Rosner v, Paley, 65 N.Y.2d 736 (1985). "Attorneys are free to select among reasonable courses of action in prosecuting clients' cases without thereby exposing themselves to liability for malpractice." Iacovello, 4 A.D.3d 208. Questions as broad as the selection of unsuitable and unqualifiable experts (Dimond v. Salvan, 78 A.D.3d 407 (1st Dept. 2010); Dimond v. Heinz Pet Prods. Co., 298 A.D.2d 426 (2d Dept. 2002)), the selection of questions on cross-examination and what fact witnesses to use are subsumed within the attorney judgment rule.

Ascertainable Damages

Damages in a legal malpractice case are designed "to make the injured client whole." Rudolf v. Shayne, Dachs, Stanisci, Corker & Sauer, 8 N.Y.3d 438 (2007); Campagnola v. Mulholland, Minion & Roe, 76 N.Y.2d 38 (1990). Damages are calculated dependent upon the situation in which the legal malpractice case arises. The simplest case is that of a personal injury action never started, in which the statute of limitations has run. There, the finder of fact must simply determine the value of a hypothetical judgment that would have been obtained had the attorney commenced the action. McKenna v. Forsyth & Forsyth, 280 A.D.2d 79 (4th Dept. 2001). Put another way, the measure of damages is generally "the value of the claim [or defense] lost."

Plaintiff must plead and prove actual ascertainable damages as a result of the attorney's negligence. Mere speculation about a loss from an attorney's "alleged omission is insufficient to sustain a prima facie case of legal malpractice." Barnett v. Schwartz, 47 A.D.3d 197 (2d Dept. 2007).

Collectability is an issue in the determination of damages. After plaintiffs prove that they would have obtained a specific dollar verdict, they then have to prove (in the Second, Third and Fourth Departments) how much of that verdict would be collectible. Damages recoverable are limited to the amount that "could or would have been collected" in the underlying action. Schmitt v. McMillian, 175 A.D. 799 (1st Dept. 1916); Vooth v. McEachen, 181 N.Y. 28 (1905) Collectability of a "hypothetical judgment against the underlying tortfeasor is a factor to be considered by the trier of fact." Chiaffi v. Wexler, Bergerman & Crucet, 116 A.D.2d 614 (2d Dept. 1986). In the First Department, the burden in on defendant to show non-collectability.

Conclusion

Legal malpractice consists of four elements. Almost anyone can recognize the first, and in most cases, the departure is obvious, patent and prominent. Proximate cause and ascertainable damages are fairly east to determine, after looking at privity and standing.

The major battleground in legal malpractice is in the "case within a case" analysis. Plaintiffs lose underlying cases all the time even with no mistakes. In trip and fall cases, there are defenses of notice, reasonable care and de minimis defects. In car cases, there are defenses of serious physical injury. In medical malpractice, there are medical judgment defenses.

In all cases, the underlying matter is subject to technical defenses of statute of limitations, standing, collateral estoppel, res judicata, as well as the more general defense that "plaintiff would have lost the case." It is here that the major battle on otherwise obvious legal malpractice cases takes place.

Andrew Lavoott Bluestone is an attorney in Manhattan, specializing in legal malpractice litigation. He is board certified in legal malpractice by the American Board of Professional Liability Attorneys. He is an adjunct professor of law at St. John's University Law School and the author of the New York Attorney Malpractice Blog, at blog.bluestonelawfirm.com.