Attorney or Scrivener? LPL Claim Dismissed Due to Non-Representation Clause

A recent decision rendered by the New York Appellate Division, First Department, on October 17, 2019, held that the lower court properly dismissed a legal malpractice complaint on the ground that documentary evidence established there was no attorney-client relationship. In Seaman v Schulte Roth & Zabel LLP, 176 A.D.3d 538 (1st Dep’t 2019), the dispute centered on the enforceability of a “non-representation clause” disclaiming the existence of an attorney-client relationship and reaffirmed the importance of providing such clauses where an attorney seeks to limit potential exposure for work performed outside of an attorney-client relationship.
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Missed Deadlines, No Communication Equals Disbarment

Deadlines are a way of life for most professionals, certainly attorneys. The practice of law involves tons of deadlines, many of which are subject to some form of extension, but an attorney must take active steps to either meet each deadline or see to it that the deadline is adjusted. An attorney's obligation of competency and communication require that counsel meet each deadline and inform her client when something goes wrong. In a recent disciplinary proceeding, an attorney was disbarred for failing to competently represent his client, failing to communicate, and then failing to participate in the disciplinary process.
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Timed Out: Continuous Rep Doctrine Denied in Maine

You generally know the drill: a plaintiff has limited time to file suit. Generally, the statutory period begins when the plaintiff knows or reasonably should know that she has been harmed and that the defendant caused that harm. You also generally know that statute of limitations defenses are not nearly that simple. There are variables including the discovery rule and the gist of the action doctrine which may impact the argument. The continuous representation doctrine is another wrinkle that could affect whether a malpractice claim is subject to dismissal pursuant to the statute of limitations. In a recent decision, the Maine Supreme Court affirmed a dismissal of a legal malpractice claim on statute of limitations grounds and refused to apply the continuous representation doctrine.
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Fee Dispute ≠ Malpractice

A New Jersey appeals court recently ruled that a disbarred attorney cannot sue his former attorney for malpractice in connection with a fee dispute.  In an unpublished opinion in the case of Schildiner v. Toscano, the Appellate Division upheld a decision from the Essex County Superior Court dismissing the lawsuit filed by the disbarred lawyer ("Lawyer"), against the firm he hired, ("Law Firm").
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The Dreaded Settle and Sue: Alive and Well in New Jersey

It is no secret that parties more often settle than proceed through trial. While courts roundly applaud this as beneficial to both the system and litigants, it sometimes generates second guessing from the clients. As Larry David put it, "a good compromise is when both parties are dissatisfied." It is therefore no surprise that many legal malpractice claims follow from settlements, despite the general principle that the settlement itself precludes such a suit. In a recent decision from the New Jersey Appellate Division, the court's discussion of when this principle applies does little to pacify concerns of attorneys that their clients will settle and sue. Even well documented settlement agreements, and testimony reflecting a voluntary resolution, still can be undone via a malpractice complaint. 
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Secrets Are No Fun, Especially When It Comes To Malpractice Coverage

The risk of a malpractice claim is real. That's the bad news. But, now that we have your attention, the good news is that insurance is available to defend and indemnify professionals who face malpractice claims. In order to receive coverage, however, professionals generally must disclose whether they are the subject of any potential claims when completing their applications.  If an insurer discovers that a professional had knowledge of a potential claim, but failed to disclose it, it could rely upon the nondisclosure as a basis to disclaim coverage.
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Malpractice from Litigation Funding?

Third-party litigation funding is still in its relative infancy and yet it has blossomed into a massive industry. Litigation funding spans from payday-like loans for personal injury litigation to multi-million dollar intellectual property disputes. Many attorneys across the spectrum have commented on the issues that could arise from this new market, but malpractice lawsuits in connection with the funding itself are extremely rare. However, a recent suit filed in the United Kingdom could be a sign of things to come for those firms who are involved in the financing transaction itself.
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How Long Is Too Long to Wait for Malpractice Actions?

One of the most common problems facing a would-be plaintiff considering a malpractice case is when to file suit. Similarly, those that defend professionals must consider whether to move to stay proceedings if applicable. Especially with accountants and attorneys, causation and damages are difficult to calculate until the underlying matter has concluded. This means that the notoriously long legal process can often come into conflict with the statute of limitations, or create evidentiary problems. The decision is whether to wait many years for the underlying action to conclude and damages to materialize, or continue with the malpractice action in the midst of unresolved issues although the facts are still fresh in witness’s minds. In a recent Texas appellate decision, the court ruled that the case should proceed immediately.
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Is a Client’s Criminal Prosecution Foreseeable?

Professionals assume a duty of care to their clients.  Accordingly, professionals may be held liable for damages to clients that are proximately caused by their negligent acts.  In many cases, the link between the professional’s negligent act and the client’s injury is clear, such as a missed deadline that waives a client’s rights.  The limits of foreseeability become more difficult to define when the professional’s alleged misconduct triggers independent acts by third parties, such as a government investigation of the client.
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