Law Firms And Liability: Can They Be Sued?

Yes, a law firm can be sued. While it is challenging to prove malpractice, there are several reasons why a law firm or lawyer may be sued. This includes negligence, a breach of contract, or a breach of fiduciary duty. Negligence may include missing a deadline, filing the wrong papers, or failing to comply with court orders. A breach of fiduciary duty may arise when a law firm or lawyer has a history with one of the parties in a business transaction. If a lawyer is suspected of misconduct, it is possible to file a grievance with the ethics committee of the state bar association.

Breach of contract or fiduciary duty

Law firms can be sued for breach of contract or fiduciary duty. A breach of fiduciary duty is a business tort, which is a cause of action for a civil lawsuit. A fiduciary relationship is formed when one person trusts another, and they are both aware of it. This relationship is governed by statute or a contract that outlines the specific duties owed.

Attorneys, for example, are fiduciaries of their clients and have a duty to act in their clients' best interests, protect their clients' rights, and maintain confidentiality, competence, diligence, and loyalty. If a law firm or an attorney fails to uphold these responsibilities, they can be sued for breach of fiduciary duty.

In California, for instance, there are several cases where law firms or attorneys have been sued for breach of fiduciary duty. In the case of Flatt v. Superior Court (1994), an attorney was disqualified from representing a client due to access to confidential information from a previous representation. In another case, David Welch Co. v. Erskine & Tulley (1988), a law firm was entrusted with funds to pay off an encumbrance on real property, which constituted a breach of fiduciary duty.

To successfully sue for breach of fiduciary duty, several elements must be present. Firstly, a fiduciary relationship must exist between the plaintiff and the defendant. This relationship can be formal or informal and is based on a higher degree of trust than typical marketplace interactions. Secondly, the defendant must have breached their fiduciary duty, such as failing to disclose certain information, misappropriating funds, or misusing their position. Lastly, the breach must have resulted in economic injury to the plaintiff or economic benefit to the defendant. It is important to note that there is a four-year statute of limitations for filing a breach of fiduciary duty lawsuit.

If an individual believes they have been harmed by a breach of fiduciary duty, they should consult a skilled attorney who can guide them through the legal process and help them understand their options.

Negligence

A law firm can be sued for negligence if it fails to uphold the standard of care expected of legal professionals. This standard of care is defined as the level of caution that a reasonably intelligent person would exercise in a similar situation. In the context of legal services, negligence occurs when a lawyer or law firm fails to use the ordinary skill and care that would be used by other lawyers or firms in handling a similar problem or case under similar circumstances.

To establish negligence and pursue compensation, one must demonstrate duty of care, breach of duty, causation, and damages. In other words, it must be proven that the lawyer or firm had a legal obligation to provide competent legal services, and that they breached this duty by making a mistake or failing to act in the client's best interest. This breach of duty must have directly resulted in harm to the client, typically in the form of financial losses or negative consequences to their legal case.

There are several examples of negligence in the context of legal services. This includes situations where a lawyer fails to file documents or meet deadlines, provides incompetent legal advice or information, acts in a way that creates a conflict of interest, or settles a case without the client's authorization. For instance, in Texas, a client must use expert witnesses to establish the reasonable degree of care the attorney should have used, and this witness is typically an attorney practicing in the same area and locale.

It is important to note that establishing a legal malpractice claim for negligence is complex and varies from case to case. The specific criteria for proving negligence may differ based on jurisdiction and the nature of the case. Additionally, there are alternative options to consider before suing for negligence, such as filing a grievance with the ethics committee of the state bar association or hiring another attorney to negotiate a settlement for the mistakes made.

Failure to file documents

Law firms and attorneys can be sued for a variety of reasons, including failure to file documents. This can be considered negligence and a breach of the duty of care owed to the client. When an individual or business hires a lawyer, they expect the lawyer to file documents with the court in a timely manner and meet all deadlines. Failure to do so can irrevocably damage the client's case and undermine their right to justice.

In the context of failure to file documents, there are several scenarios in which a law firm or attorney can be held liable:

Failure to Meet Deadlines

Attorneys are expected to have a thorough understanding of key deadlines and technical rules governing lawsuits. If a lawyer fails to file documents before the expiration of a statute of limitations or misses other critical deadlines, they can be sued for negligence. This conduct falls below the accepted standard of care, and clients can seek legal action to recover any damages caused by the lawyer's failure to meet deadlines.

Incompetent Legal Representation

Incompetent legal representation, including the failure to properly advise clients, can lead to lawsuits against law firms. This may include instances where a lawyer fails to file the necessary documents due to incompetence or a lack of understanding of the legal requirements.

Conflict of Interest

Law firms and attorneys have a duty to avoid conflicts of interest. If a lawyer allows related business interests or personal interests to affect their representation, they may be sued for negligence. For example, referring clients to an enterprise in which the lawyer has a financial interest without proper disclosure can create a conflict of interest.

Misrepresentation

Law firms and attorneys may also be sued for misrepresentation or giving wrong advice to clients. This includes making false statements about the quality or benefits of their services or engaging in any action that is unconscionable. Additionally, attorneys may be liable to non-clients if they make false representations that they know will be relied upon by those non-clients.

Breach of Fiduciary Duty

Attorneys owe their clients a fiduciary duty, which includes placing the interests of the client above their own and acting in good faith. If a lawyer fails to file documents because they are prioritizing their interests over the client's, they may be sued for breach of fiduciary duty.

It is important to note that winning a legal malpractice case against a law firm or attorney can be challenging due to the amount of evidence required to prove negligence and breach of duty. However, if a lawyer's failure to file documents has caused significant harm or financial loss, clients have the right to seek legal recourse and hold the law firm accountable.

Conflict of interest

Conflicts of interest can occur in various forms. For example, an attorney may not represent two or more clients in the same or substantially related matters, as it would be impossible to fulfil the duties to both clients simultaneously. In such cases, the lawyer must notify all affected clients and obtain their informed consent to proceed. However, some states, like California, do not allow waivers of a client's consent if another client expects confidentiality. Attorneys must also refrain from referring clients to enterprises in which the lawyer has an undisclosed financial interest.

Additionally, a lawyer's personal interests must not take precedence over their client's interests. For instance, if a lawyer's conduct is in question, they may struggle to provide impartial advice. Similarly, discussions about potential employment with an opponent of their client or their representatives could limit the lawyer's ability to represent the client. Lawyers must also be cautious about switching sides in a case, as this could violate the “hot potato” doctrine, prioritising loyalty to the original client.

To prevent conflicts of interest, law firms should implement comprehensive systems to check for potential conflicts. These systems should be appropriate for the firm's size and type of practice and should be regularly updated as cases progress and new parties are introduced. If a conflict arises, it should be promptly addressed, and lawyers should seek advice from colleagues or external counsel. While conflicts of interest can often be resolved, severe conflicts may result in lawyer disciplinary proceedings, suspension of their law license, disqualification, or disbarment. In such cases, the lawyer may also face a legal malpractice lawsuit.

Malpractice

Legal malpractice occurs when a lawyer fails to use the ordinary skill and care that would be used by other lawyers in handling a similar problem or case under similar circumstances. In other words, it's not malpractice just because your lawyer lost your case.

To win a malpractice case, you need to prove that the lawyer's services fell below the applicable standard of care. A lawyer is not liable for every mistake he or she may make. Determining that standard of care is no small task and usually involves expert witnesses—usually lawyers who practice in the relevant field. One way for a lawyer to win a malpractice suit in many jurisdictions is to show that the error was a professional judgment call. Lawyers need to make judgment calls. Sometimes those calls are right, and sometimes they are wrong. When they are wrong, they may hurt the client, but if the lawyer exercised reasonable care, they may be excused.

The most common cause of action presented in legal malpractice claims is a negligence claim. To prevail on a negligence claim, the client must prove that the attorney did not use a reasonable degree of care. In other words, the client must prove that the attorney took some action that a prudent attorney would not have taken or that the attorney failed to take some action that a prudent attorney would have taken. There are many ways an attorney may be negligent. For example, if an attorney gives wrong advice to the client, the attorney may be negligent. If an attorney fails to file public documents, such as a lawsuit or a deed, on time or in the right place, the attorney may be negligent. Or, if the attorney acts to create a conflict between them and their client, the attorney may be negligent.

Legal malpractice cases are two cases in one. You must prove that your attorney exhibited negligence while handling your case, and if that negligence had not occurred, you would have received a more favorable outcome, settlement, or judgment than you did. Substantial levels of re-litigation of the original case are often necessary to be successful in a legal malpractice case. Even when the attorney in your original case made a serious error, a jury may feel you would have lost the case no matter what. Many legal malpractice cases arise from a situation in which the attorney recovered some money for their client, but the client believes they would have received more but for the attorney’s negligence.

Frequently asked questions