Legal Malpractice

Barnett v. Schwartz and Pre-Judgment Interest in Legal Malpractice

By (Andrew Lavoott Bluestone)

The question of pre-judgment interest in legal malpractice has not been widely understood .  Generally, it was thought that an award of pre-judgment interest was determined on the same basis as in the underlying case.  Contract damages, yes.  Pain and suffereing, no.

However, this case indicates that the real inquiry is whether there should be pre-judgment interest calculated from a hypothetical judgment which the plaintiff should have obtained, had there been no malpractice.  Such a hypothetical judgment, years prior to the legal malpractice case, may allow for interest from that date, at 9% per annum!

Barnett v. Schwartz, 2007 NY Slip Op 09712, Appellate Division, Second Department, Decided 12/11/07  stands for a somewhat novel principal. Prejudgment interest appears to be permitted in legal malpractice, whether it would have been permitted in the underlying case or not. This wide sweeping pronouncement appears to apply not only to recognized breach of contract causes of action, but to personal injury legal malpractice damages, too.

“CPLR 5001 operates to permit an award of prejudgment interest from the date of the accrual of the malpractice action in actions seeking damages for attorney malpractice”, citing Horstmann v, Grasso PC, 210 AD2d 671; Rudolf v. Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 444 (2007)

Full post as published by New York Attorney Malpractice Blog on January 10, 2008 (boomark / email).