Legal Malpractice

Settlements and Subsequent Legal Malpractice

By (Andrew Lavoott Bluestone)

We're proud to point today to the article "Settlements and Subsequent Legal Malpractice" in today's New York Law Journal.  One interesting wrinkle on the legal malpractice scene is how settlements, and the rote allocutions at settlement affect legal malpractice.

"It is well settled that to establish a cause of action for legal malpractice, "a plaintiff must demonstrate that the attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession and that the attorney's breach of this duty proximately caused plaintiff to sustain actual and ascertainable damages." Rudolf v. Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438 (2007), quoting McCoy v. Feinman, 99 NY2d 295 (2002), "To establish causation, a plaintiff must show that he or she would have prevailed in the underlying action or would not have incurred any damages, but for the lawyer's negligence" Rudolf at 442; Fireman's Fund Ins. Co. v. Farrell, 57 AD3d 721 (2d Dept. 2008).

The four elements of legal malpractice, put more simply, are: departure, proximity, ascertainable damage, and the "but for" element. The defense of a legal malpractice action may take place on any of the four elements set forth. Was the behavior of the attorney a departure from the degree of skill and care? Was the departure a proximate cause of the damage? Was there one or more than one cause of the damage? "

One way that settlements may upset a later legal malpractice case is when the judge asks "Are you satisfied with the work of your attorney?"  How this question crept into a settlement allocution is buried in ancient ritual.  How important it is is shown in a few recent cases.

"Recently, one Appellate Division case and two Supreme Court cases have challenged the "effectively compelled" principle, and in effect, turned it on its head. The setting for this triumvirate of cases is matrimonial settlements. For reasons not sanctioned in the CPLR or any statute, the custom on settlement of a matrimonial action is to allocute the two parties to the settlement. Beyond the questions of whether the parties have capacity, are in sufficient health to understand, are not taking cognitive altering medication, the court often chooses to ask whether the clients are satisfied with their attorney's work. The genesis of this practice is not clear; its purpose seems to be to insulate the attorneys from later criticism. In this latest set of cases, the insulation appears to work."

For the rest of the discussion, please see today's NYLJ.

Full post as published by New York Attorney Malpractice Blog on January 27, 2010 (boomark / email).