United States: Reduce The Risk Of Malpractice Claims

Legal malpractice claims just keep coming. Rarely does a week go by without another article about a new high-profile legal malpractice lawsuit. Sometimes, these claims are the result of a simple mistake. Claims can arise when an attorney is overworked and may be tempted to pay less attention to the details of his practice. Yet most claims do not involve any mistake or error by the attorney. Well over one-half of all malpractice claims against attorneys lack any merit.1

While meritless claims are usually dismissed or abandoned, that's little comfort to attorneys who have had a claim brought against them. After all, when a claim is made, attorneys must deal with it, investing time to defend the claim, reporting it to colleagues and insurers, and paying whatever deductible might apply. Needless to say, it is a distraction from the practice of law.

Beyond that, claims leave a lasting impact. From the moment a legal malpractice claim is made, attorneys must answer "yes" to the question, "Has a claim ever been made against you?" This answer does not change even if the claim has been dismissed or abandoned.

The bad news is that most attorneys will face more than one claim over the course of their careers. The good news is that there are things attorneys can do to reduce the risk of having a legal malpractice claim made against them. An important first step is recognizing the difference between actual legal malpractice and a legal malpractice claim.

Legal malpractice occurs only when an attorney's breach of a professional duty proximately causes damages.2 Anything involving less than all three elements—duty, breach, and proximately caused damages—is a claim but is not malpractice.3 Moreover, in Colorado, unless it involves fraud or malice, with few exceptions, a legal malpractice claim must be based on the existence of an attorney-client relationship between the plaintiff and the defendant.4

Duty

Attorneys' duties are in a state of flux. Certainly, attorneys owe their clients a professional duty. More uncertain is the question of to whom, besides their clients, attorneys owe a duty. It is clear that attorneys do owe some duties beyond the duties to their clients.5 For example, Rule 1.18(b) of the Colorado Rules of Professional Conduct states, "Even when no client-lawyer relationship exists, a lawyer who has had discussions with a prospective client shall not use or reveal information learned in the consultation." Generally, however, attorneys do not owe a duty of reasonable care to nonclients, including prospective clients.6

Most often, this amorphous duty risk arises out of a transaction involving only one attorney, such as a residential real estate transaction with a single closing attorney or a dissolution of marriage agreement with only one attorney. The common denominator is a misconception by non-clients that the attorney is looking out for their interests as well as those of the attorney's clients.

The key to minimizing this risk is to leave nothing to chance or misinterpretation. First, attorneys should make clear whom they represent. In addition, they need to make clear that they have not undertaken, and are not undertaking, any duties to anyone besides the client. For example, in the residential real estate context, this involves a simple one-paragraph disclaimer signed by all the participants at the closing. It does not have to say much but should confirm three things: (1) the identity of the attorney's client; (2) that the attorney is not undertaking and has not undertaken any duty to anyone else; and (3) that the signatories understand and agree that the attorney has not undertaken any duty to anyone other than the client.

Attorneys can use a similar approach in other situations involving non-clients. For example, if an attorney interacts with an unrepresented spouse in a divorce proceeding, the attorney should communicate only in writing unless the unrepresented spouse signs a disclaimer. The disclaimer should match the attorney's engagement letter to the client. This way, the identity of the client in the disclaimer letter precisely tracks the identity of the client in the disclaimer. Any ambiguity is typically to the attorney's disadvantage.7

Breach of Duty

Attorneys have the duty to exercise the level of knowledge, skill, and judgment ordinarily possessed by members of the legal profession in carrying out the services for their clients.8 This means that an attorney must do what an ordinarily skillful Colorado attorney would have done at the time the action was taken.9

As the practice of law evolves, so does the standard of care in Colorado. This has always been true. Computers replaced word processors, which replaced typewriters, which replaced quills. The specifications for briefs in some jurisdictions now involve word counts and formatting restrictions; attorneys have a duty to comply with the restrictions or face the risk that a court will strike their briefs.

Colorado attorneys must stay abreast of these changes (and changes in the law) and adapt their practices accordingly.10 Saying that "it is the way things have always been done" is not a defense to a legal malpractice claim. Instead, attorneys must perform their legal services in accordance with the standard of care today.11

An attorney's minimal level of competency may also include knowledge of the technology relevant to her practice. For example, in June 2015, the State Bar of California Standing Committee on Professional Responsibility and Conduct issued an advisory opinion setting forth nine areas of technological competence for attorneys who practice in that state.12 Further, comment 8 to American Bar Association Model Rule of Professional Conduct 1.1, which Colorado has yet to adopt, states that "[t]o maintain the requisite knowledge and skill, a lawyer should keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology . . . ."13

CLE programs are an effective way of obtaining the resources necessary to stay up to date on the law and the modern-day law practice. But attorneys must do more than just attend CLE seminars. Attorneys and law firms must stay abreast of the law and adapt their law practices accordingly, or face higher risks of legal malpractice. As the practice changes, so must attorneys and law firms.

Proximately Caused Damages

Legal malpractice involves more than just the breach of a professional duty; there must also be proximately caused damages.14 For example, an attorney who misses the statute of limitations for filing a frivolous or meritless claim has not committed legal malpractice.15 Similarly, an attorney who fails to timely file a meritless appeal has not committed legal malpractice.16

To establish a legal malpractice claim, the former client has the burden of proving "a case within a case."17 The former client must establish that, but for the attorney's mistake, the former client would have achieved a successful result. Accordingly, an attorney error that deprives the former client of the opportunity to pursue a frivolous claim or appeal does not establish legal malpractice because the former client could not prove that, but for the attorney's negligence, the underlying suit would have succeeded. Of course, the reverse is also true. There are times when a client suffers damages but there is no duty or no breach of the standard of care.18 This is an important distinction.

Far too often, when confronted with an error, attorneys admit to legal malpractice. This is a costly mistake. First, they are undertaking liabilities that would not otherwise exist. Second, most professional liability insurance policies contain a "no admission" clause. Attorneys who admit liability in violation of such a clause risk the forfeiture of their insurance coverage.19

The party asserting a legal malpractice claim bears the burden of proving that the attorney's mistake caused some damage.20 In the litigation context, this means proving that there would have been a different result if the attorney had provided reasonably skillful and prudent legal services.21 With regard to closing documents, it means that the alleged error actually impaired or damaged someone to whom a duty was owed.22 A mistake without consequence is not legal malpractice.

Conclusion

Legal malpractice happens, but it does not have to be inevitable. The first step is understanding what constitutes legal malpractice and what does not.

Footnotes

1. Klevens et al., The Lawyer's Handbook: Ethics Compliance and Claim Avoidance 1 (1st ed., ALM Media Properties, LLC, 2013).

2. Bebo Constr. Co. v. Mattox & O'Brien, P.C., 990 P.2d 78, 83 (Colo. 1999).

3. Stone v. Satriana, 41 P.3d 705, 712 (Colo. 2002).

4. State Farm Fire & Cas. Co. v. Weiss, 194 P.3d 1063, 1065 (Colo.App. 2008).

5. Colo. RPC 1.18.

6. Allen v. Steele, 252 P.3d 476, 482 (Colo. 2011) (citing Mehaffy, Rider, Windholz & Wilson v. Central Bank Denver, N.A., 892 P.2d 230, 240 (Colo. 1995). See also Colo. RPC 1.18, cmt. [1] ("prospective clients should receive some but not all of the protection afforded clients").

7. See Moland v. Indus. Claim Appeals Office, 111 P.3d 507, 511 (Colo.App. 2004) ("Absent such evidence or intent [derived from the language of the contract], as a last resort, the court may apply the principle of construing the ambiguous language against the drafter.").

8. Stone, 41 P.3d at 711.

9. Id. at 712.

10. Colo. RPC 1.1, cmt. [6] ("To maintain the requisite knowledge and skill, a lawyer should keep abreast of changes in the law and its practice, engaging in continuing study and education and comply with all continuing legal education requirements to which the lawyer is subject.").

11. See Stone, 41 P.3d at 712.

12. See State Bar of California Standing Committee on Professional Responsibility and Conduct, Formal Op. No. 2015-193 (2015).

13. ABA Model Code of Professional Responsibility Rule 1.1, cmt. [8] (2015) (emphasis added).

14. Bebo Constr. Co., 990 P.2d at 83.

15. See Giron v. Koktavy, 124 P.3d 821, 825 (Colo.App. 2005).

16. See Bebo Constr. Co., 990 P.2d at 83 ("The plaintiff must demonstrate that the claim underlying the malpractice action should have been successful if the attorney had acted in accordance with his or her duties.").

17. See id. at 824.

18. E.g., Stone, 41 P.3d at 709

19. Saab Fortney, "Legal Malpractice Insurance: Surviving the Perfect Storm," 28 J. of the Legal Profession 41, 61 ( June 11, 2004).

20. Hopp & Flesch, LLC v. Backstreet, 123 P.3d 1176, 1183 (Colo. 2005).

21. Fleming v. Lentz, Evans, & King, P.C., 873 P.2d 38, 40 (Colo.App. 1994) ("In order to prove causation and damages in a malpractice suit, a plaintiff must demonstrate that his unpursued claim would have been successful had the attorney actually litigated the claim.").

22. See Aller v. Law Office of Carole E. Schriefer, P.C., 140 P.3d 23, 25 (Colo.App. 2005) (plaintiff unable to prove attorney's breach of fiduciary duty caused her to sustain damages in matter involving termination of a business).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
24 Oct 2017, Seminar, Washington, DC, United States

The Dentons Forum for Women Executives invites you to join us for a luncheon featuring guest speaker Liza Mundy, journalist and author. Ms. Mundy recently released her latest book, Code Girls, the riveting untold story of more than 10,000 spirited young American women who cracked German and Japanese codes to help win World War II.

27 Oct 2017, Seminar, New York, United States

Please join us for a milestone event, our 10th annual CLE Seminar for In-House Counsel.

1 Nov 2017, Seminar, Washington, DC, United States

Celebrate the 58th anniversary of Dentons' Government Contracts practice

 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.