Credit: David Smart/Shutterstock.com Court Rightly Absolved Law Firm in Case of Client Fraud
Liability should attach only if the "attorney misdirects or misappropriates funds, or when an attorney has acted contrary to a known, competing claim—or a competing claim that reasonably should have been known." No further duty should be imposed upon counsel.
September 27, 2020 at 10:00 AM
5 minute read
A wirer of funds to an attorney trust account sued a law firm for breach of fiduciary duty and conversion when the firm's client defrauded the transferor. There is no liability, however, according to the New Jersey Supreme Court, where the law firm had no knowledge of the transferor's existence or any agreement of the transferor and its client, had no contact with the transferor, and made no representations to the transferor.
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