Legal malpractice actions often arise out of a client’s belief that they were not adequately compensated in an underlying matter, and a belief that but for the actions of their attorney the client would have received something more. While many practitioners in Pennsylvania are aware of the Muhammad Doctrine that generally precludes clients from suing after settlement, legal malpractice complaints will often assert that a better settlement could have been achieved, but for the attorney’s conduct. These cases can proceed outside of the Muhammad Doctrine if there was no settlement of the underlying action, or if the matter falls into one of the several exceptions to the Muhammad Doctrine. However, there is still a very good argument- with very good reasons behind it—that speculation regarding settlement cannot be the basis for damages in a legal malpractice action. It is almost always true that in order to succeed in a legal malpractice action in Pennsylvania, the plaintiff must prove that but for the attorney’s alleged negligence they would have won the underlying action.

Pennsylvania has long held that under the “case-within-a-case” analysis for legal malpractice actions, the plaintiff must prove they would have won the underlying action. This is because of our courts’ historic reluctance to speculate on settlements. Pennsylvania courts have justifiably avoided second-guessing settlements in all contexts, not just the legal malpractice context. “Settlement of matters in dispute are favored by the law and must, in the absence of fraud and mistake, be sustained. Otherwise any settlement agreement will serve no useful purpose.” See Greentree Cinemas v. Hakim, 432 A.2d 1039, 1041 (Pa. Super. 1981).