Legal Malpractice: What is it?
In the context of malpractice claims, they are often confused with either crime prevention or negligence. A claim for legal malpractice is a little of both, as it alleges the negligent act of an attorney, that in the course of the representation of the client, money was lost or time was lost. While it is a risk to be sued for negligence, it is part of being in business, and being in business is part of the risk of jurisprudence. In other words, every case has risks and outcomes. There must be a fall and there must be a gain; therefore, there must be a chance of error or a chance of disaster.
Legal malpractice is the failure of an attorney to exercise reasonable skill and knowledge in their handling of a client’s case that resulted in financial loss for the client. It is simply, malpractice by an attorney. There are two main parts of a legal malpractice claim: Any discussion of legal malpractice law in New Jersey must begin with the Supreme Court of New Jersey’s opinion in the landmark case of McKenna v . Passaic County, 95 N.J. 299 (1984), in which the Supreme Court of New Jersey held that a public entity may be liable for the torts of its attorneys under a theory of "vicarious liability." In the McKenna case, the Supremes held that under the Tort Claims Act, a public entity is liable for the wrongful acts of its employees, whether negligent or intentional. "Legal Malpractice" generally refers to the attorney’s failure to perform competently in the handling of a client’s case and results in financial lost to the client. Attorneys who breach their fiduciary duty to their clients are potential defendants in a legal malpractice claim. Legal malpractice actions have become common in the legal profession, but the standard of care is still evolving. A victim of legal malpractice will find it very difficult to prove a claim – much has to do with the legal burdens involved.
Causes of Legal Malpractice in NJ
Legal malpractice cases in NJ are based upon:
- negligence
- breach of fiduciary duty
- breach of contract
- negligence per se
- fraud
- breach of partnership agreement
New Jersey law defines legal malpractice as a lawyer’s failure to exercise the duty of meeting the standards of a reasonable, prudent attorney which causing harm to the client. In NJ an "ordinary" cause of action is a potential medical malpractice case, while a "special" form of legal malpractice is the failure to file a complaint that is dismissed due to the statute of limitations having run.
Common types of causes of action in legal malpractice claims include:
An attorney’s failure to timely file an action within the statute of limitations.
Failure to possess and use the "professional skill and ability reasonably necessary for the performance of his service."
Failure to provide the client with an adequate retainer agreement setting forth the terms of the relationship.
Improper or incompetent representation.
Negligent supervision of subordinates under the attorney’s supervision.
Agent’s failure to remit settlement proceeds to the principal.
Agent’s misappropriation of client’s trust funds.
Inability to prove the underlying case.
Failure to issue a media letter.
Failure to disclose conflicts of interest.
Representing clients with adverse interests.
How to Prove a Legal Malpractice Case
How to Prove Legal Malpractice: Understanding the 4 Elements in New Jersey
While there is no "special" type of duty involved in a legal malpractice claim, a lawyer in New Jersey is required to adhere to the Rules of Professional Conduct and the New Jersey Lawyers’ Creed. The duty owed is as to whether or not the attorney’s services were reasonable, that is what the duties of care are, i.e. what the "profession" would do. Questions like these arise: Was the case properly investigated? Were there sufficient funds paid in advance or costs discussed with the client up front?
The 2nd element is breach of that duty. The issue is not did the lawyer work on the case, the issue is: Did the lawyer do what a professional lawyer would have done? Did the lawyer harm the case in some way, and if so, would a reasonably competent lawyer under the same circumstances have done the same thing or not repaired the harm.
The 3rd element is Causation: If there is a lawyer malpractice and the case is "lost," how does one prove that the client was deprived of a favorable outcome? What was the damage? Here is where it gets interesting. In an alleged "lost cause" or negligence resulting in a lost case, the question is: what would have happened in the case had there been no negligence. If the answer is "there would be the same result," then there is no legal malpractice. If the answer is "there would be a different better result," then plaintiff will have to come forward with an expert to testify within a reasonable degree of probability what the result would have been, making this analogous to a "lost chance" case.
The 4th element is damages. The client must prove that its damages flowed from legal malpractice.
Statute of Limitations for Legal Malpractice in NJ
In New Jersey, there is a time limitation known as the statute of limitations for bringing a legal malpractice lawsuit against an attorney. If you do not file your legal malpractice claim within the statute of limitations, you might forfeit your ability to file a claim at all.
The statute of limitations for legal malpractice claims in New Jersey lawyers is now two years. In other words, for Fernicola v. Holloway, Inc., 401 N.J. Super. 62, 61 (App. Div. 2008), a statute of limitations of two years applied to all ‘malpractice actions.’ This statute is codified in New Jersey Statutes Annotated, where the law reads: "a person having a claim for an injury to his person caused by a wrongful act, negligence or default shall have a [two-year] statute of limitations." N.J.S.A. 2A:14-2(a); see also Desai v. Hessen, 325 N.J. Super. 434, 444-45 (App. Div. 1999) (finding that the ‘two-year statute of limitations governs actions against a lawyer for his alleged negligence in infringing on the rights of third parties.’). Thus, a legal malpractice claim "accrues at the time of [an] alleged act of wrongdoing and in which, had the attorney been prudent and competent, such an act would not have been committed." Credigy Receiver, LLC v. O’Connor, 395 N.J. Super. 392, 401 (App. Div. 2007).
What to Do if You Think Legal Malpractice Occurred
The first step to take is to go over the transaction or matter in in your own mind. Ask yourself, what did I expect from my attorneys? Then ask yourself, what did I get from my attorneys? Then ask yourself – are there any people who can help me verify what I expected and what I received?
For instance, is the attorney you hired known by others as good or poor at performing the work for which you hired him/her? Does she/he specialize in the type of work you asked for? Had she/he done the work you needed before? These are all things for you to consider.
Take a long hard look at your attorney’s retainer agreement and your file. Do you have the language that you were promised? Does your attorney live up to his/her representation? Did you pay for something that you did not get?
Next step is to ask the attorney to explain what he/she did. Ask if they think better work could have been done for the same money.
If the gut reaction after these honest self-assessments are that the attorney was at fault for not doing what was required. The next step is the most important – do not delay. The statute of limitations in New Jersey for professional malpractice including legal malpractice is 6 years. To sue an attorney for malpractice or for that matter any other professional, you have to have an expert testify that the work the attorney did was below the standard of care for an attorney . It is not enough to simply say your attorney was rude or was not ready for trial or did not return your phone calls or got a bad judgment in your case. All attorneys are rude, come unprepared, do not return calls, and no attorney guarantees a good judgment in any case. After all, attorneys are not judges and juries, and we don’t enter the Court with a guarantee embossed on our briefcases. All that attorneys can do is try their best. Sometimes they fail, sometimes they succeed beyond all expectations. In between failure and success there is a standard of care that your attorneys are held to.
If you dinged that standard of care you can win your case. So the question really becomes, was it low, was it high, was the service up to par? And there has to be proof of the standard of care and that your attorneys failed to meet it.
If you are thinking that maybe you have a case, the best thing you can do is consult with an attorney that does nothing but handle legal malpractice cases. They are few and far between, and not all of them are ethical. But those are the only lawyers you should talk to. And you should get references regarding their success at handling legal malpractice cases. Do not waste your time on lawyers that handle any other kind of cases. That is too much time and too much money, and too much at stake for such a consultation. And finally, know that just because you are not happy with what your attorney did, does not mean you can sue him. For a complete explanation of this you must consult an attorney.
How to Find a Legal Malpractice Attorney
Your qualified legal malpractice attorney should have at least ten years experience. There are a number of other factors that you can use to help you test the attorney, as follows:
- You must have confidence in the attorney’s ability to use experts and investigators.
- The attorney should already know the rules on consultation with an expert, and when to do it.
- The legal malpractice attorney should be familiar with other cases where there was a third party beneficiary to the contract, and a duty owed to the third party as a result.
- The legal malpractice attorney should be willing to ask for the entire retainer upfront, and should not be willing to take a case on the cheap.
- It is preferable that the attorney be a partner in a medium or large law firm, so resources can be devoted to getting the job done.
- It is important that the attorney be willing to immediately examine the file, and if not provided, file suit simply to get the file.
- You may want to send a check without a retainer agreement, and see whether the attorney provides a retainer agreement in return, or even deposits the check in trust.
- Find out how the prospective attorney intends to handle the conflict analysis.
- Ask how many of the new lawsuits that are filed in the area of practice have been dismissed prior to the completion of a trial.
Prevention of Legal Malpractice
One way to avoid legal malpractice is thorough and deliberate communication between lawyer and client. Whether the communications are in person, via telephone, or through correspondence and memos, engagement letters and the information that is exchanged between them will play a critical role in determining whether a client believes he or she has been wrongfully treated. Not only do proper communication habits provide a client with an understanding of how the case is proceeding; they also protect the attorney from possible future legal malpractice claims. Properly executed memo pads , correspondence and engagement letters will go a long way toward protecting lawyers both from malpractice claims as well as from financial liability caused by the costs of defending such claims.
Good communication habits are reinforced by thorough file management. Perhaps the best way to store this information is in a digital format with the files stored on a secure server. Electronic files should be printed out and stored in a place where they are readily available to review at a later date. Physical files should be well kept and organized on the attorney’s desk, deceased attorney’s desk, or drawing room because eventually someone will have to find them. If the files ever have to be in the hands of a third party, it is very unlikely the attorney will be present to explain what they mean. However, proper file management can provide context for the document if it is reviewed at a later date and explained in simple terms. In the event that a claim is filed, knowing the exact circumstances that surrounded a document will help to better determine the veracity of the claim.