The legal malpractice negligence statute of limitations is two years. The legal malpractice breach of contract statute of limitations is four years, as in Coleman v. Duane Morris, 58 A.3d 833 (Pa. Super. 2012).

The legal malpractice statute of limitations is widely considered commencing upon the “occurrence” of liability. Unlike other professional liability and tort actions, the statute of limitations commences when only the element of liability is established—not causation nor damages. Said differently, a lawyer may have neglected a client's matter only for the client to eventualize damages years later notwithstanding the statute of limitations to have elapsed during that time period.

As with other actions, the otherwise rigid statute of limitations is tolled by various equitable principles (but not by others).

The “continuing representation” rule has been largely considered rejected in Pennsylvania. If an attorney neglects a client but ongoing represents that client—even if to mitigate or reverse the harm (such as, via appeal), that ongoing representation does not toll the occurrence of the underlying liability (therefore, not tolling the statute of limitations).

On the contrary, the doctrines of the “discovery rule” and “fraudulent concealment” have been adopted in Pennsylvania.

Pursuant to the discovery rule, the statute of limitations is tolled when the neglected client should have or did discover the liability. Similarly, if an attorney actively misrepresents the attorney's neglect (to prevent that neglect's discovery), the statute of limitations is tolled.

Both of the above tolling doctrines do not toll the statute of limitations indefinitely. On the contrary, a neglected client still has the duty of diligence to root out the attorney's neglect.  Indeed, the knowledge (or presumed knowledge) of a “bad result” may be enough to preclude tolling.

For example, an attorney forwarding a copy of the adverse opinion but then falsely disavowing its effect towards that attorney's continuing representation of the least sophisticated client has been held to preclude tolling. As another example, an unfounded suspicion pre-disposition of a matter by a client of an attorney's neglect may be enough to begin the statute of limitations even before the matter is adversely adjudicated.

Though there are (limited) tolling devices these devices are as anti-client when applied as the occurrence rule itself. While one would think public policy would favor the client over attorney— consistent with our rules of professional conduct, specifically the Superior Court has carved out (from Supreme Court dicta) harsh legal malpractice defenses (which are dissimilar to any defenses in other torts and professional liability).

The overriding public policy concern behind the statute of limitations for legal malpractice claims is that not commencing legal malpractice actions in a timely fashion results in stale claims, as in Wachovia Bank v. Ferretti, 935 A.2d 565 (Pa. Super. 2007).

In 1989, attorney Renee Ferretti represented Wachovia's predecessor in interest, Meridian Bank in connection with a commercial loan made to Brookside Partners (a real estate development partnership). In 1990, Brookside and its surety, Ralph Pisani defaulted on the loans and a confession of judgment was entered. In 1992, Meridian and Pisani entered into a settlement agreement for Pisani and his wife to pay Meridian a fraction of the confessed judgment in exchange for its “forever discharge.”

Meridian through Ferretti filed a Praecipe to settle, discontinue and end while acknowledging satisfaction of the judgment in Lehigh County (where the action first proceeded), but failed to likewise mark the judgment satisfied in Bucks County (where the confession was transferred and settlement occurred).

After trying to sell his home, and apply for life insurance and a credit card, Pisani discovered that the Bucks County judgment had not been marked satisfied. Pisani sued Meridian in 1994 seeking liquidated damages pursuant to 42 Pa. CS Section 8104. Ferretti marked the Bucks County action satisfied and continued to defend Meridian from Pisani's now counteraction. In 1996, Ferretti became co-counsel with another firm in defense of Meridian.

In 1998, the Bucks County trial court denied Pisani's petition to assess liquidated damages, (holding that because Meridian's judgment was not paid in full Meridian was not required to mark the judgment satisfied). Pisani appealed to the Superior Court in 1999—which reversed (finding that the release forever discharge language was clear—requiring satisfaction).

On remand in 2000, the Bucks County trial court held Pisani's action for liquidated damages was barred by the two-year statute of limitations. In 2001, the Superior Court affirmed. In 2002, the Supreme Court reversed (having held interim in a separate matter that the six-year statute of limitations applied).

In 2003, on remand the Bucks County trial court entered judgment in favor of Pisani for liquidated damages in $3,163,537.83 (half the underlying confessed judgment amount—which was settled for $160,000)

The Bucks County judgment was affirmed by the Superior Court in 2004 and the Supreme Court denied Meridian's petition for allowance of appeal in 2005.

Thereafter, Wachovia filed an action in legal malpractice in 2005 which was met with an answer and new matter by Ferretti contending Wachovia's claims accrued no later than October 1994 (i.e., when Pisani commenced his action against Meridian) and were therefore barred by the statute of limitations.

Toward the legal malpractice action's claimed elapsed limitations a motion for judgment on the pleadings was granted.

In 2007, the Superior Court affirmed holding that for the legal malpractice statute of limitations purposes, the occurrence of the breach of duty commences the running of the statute of limitations not the realization of actual loss. While the discovery rule will be applied when the injured party is unable, despite the exercise of due diligence, to know of the injury or its cause, lack of knowledge, mistake or misunderstanding would not toll the running of the statute.

In so holding, the Superior Court in Ferretti cited Robbins v. Geisenberg, 676 A.2d 244 (Pa. Super. 1996).

In Robbins, plaintiff hired defendant law firm to incorporate plaintiff's surgical practice in 1976. In 1977, the defendant-firm prepared and filed an employee pension plan with the IRS. After the defendant-firm was no longer representing the plaintiff-practice, the IRS informed the plaintiff-practice that their pension plan failed to qualify and that deductions made from the plan from 1976-1979 would be disallowed. The plaintiff-practice hired new counsel and accountant to file an administrative appeal—which resulted in a settlement in 1986. The plaintiff-practice commenced a legal malpractice action against defendant-firm in 1989.

In applying the occurrence rule, the Superior Court held the breach of duty occurred in 1976-1977 (when the defendant-firm filed a flawed pension plan with the IRS). In applying the discovery rule, the Superior Court held the cause of action was tolled until the plaintiff-practice learned of the injury caused by the defendant-firm's negligence (in 1983)—when the IRS notified them that the pension deductions would be disallowed. Because the plaintiff-practice did not commence the legal malpractice action until over six years after discovering the injury, the statute of limitations barred that action.

In Ferretti the Superior Court rejected Wachovia's “actual loss” argument. That is, in other jurisdictions, the statute of limitations on a malpractice claim accrues at the time of the damage. Likewise, in those jurisdictions, the statute of limitations may be tolled by continuing representation and/or appeal. However, Pennsylvania strictly applies the occurrence—not actual loss rule, as in Garcia v. Community Legal Services, 524 A.2d 980 (Pa. Super. 1987)

Wachovia argued that a legal malpractice plaintiff would thus then be forced to take a competing position—defending the underlying claim and prosecuting their own legal malpractice action premised on that underlying claim: which was rejected in favor of the statute of limitations' public policy overriding that concern.

To be sure, the Superior Court has repeatedly held that any indicia of a putative legal malpractice plaintiff's knowledge of that plaintiff's attorney's neglect commences the running of the statute of limitations—regardless of continuing representation, appeal, actual loss, or even equitable doctrines. As stated, the public policy of the statute of limitations overrides pragmatism (e.g., a neglected client being forced to defend against the underlying claim while prosecuting their counsel) and client protection (i.e., the rigid application of the occurrence rule to the legal malpractice statute of limitations over equity).

Notably, when unpacking these cases (Ferretti, Robbins and Garcia), the occurrence rule and its rigid application appears mistakenly drawn from inapposite Supreme Court dicta. Indeed, the Supreme Court has contrarily recently held that Pennsylvania may in the future adopt the “inquiry notice” rule: whereby the statute of limitations only commences upon liability plus discovery of that liability's cause, see Nicolaou v. Martin, 195 A.3d 880 n.14 (Pa. 2018).

Whether here readers agree with this author that the occurrence rule and its application stems from inapposite dicta, it cannot be debated that our intermediate appellate court's time and time again have favored the public policy of the statute of limitations over more practical and consumer protective-like considerations.

Matthew B. Weisberg is the managing partner of Weisberg Law. He focuses his practice on consumer and individual rights throughout Pennsylvania and New Jersey. Weisberg Law represents victims of legal malpractice and other professional negligence resulting in financial injury, fraud, civil rights violations, consumer abuse and foreclosure actions.