Most legal malpractice claims are brought by clients and former clients.
But occasionally the claimant is a third party. In such cases, the duty of care extends beyond the strict confines of the attorney-client relationship and applies to others who may have been harmed by professional negligence.
A recent example: the Kentucky Supreme Court have held that the children of a man killed in an automobile accident may sue the attorney who allegedly botched an underlying wrongful death claim.
This is so, the court said, even though the attorney had been retained to represent the mother, not the children, who were minors at the time.
The case is Pete v. Anderson (Nov. 21, 2013).
Lawsuit Dismissed – Malpractice Alleged
The father died when the van he was driving ran into a retaining wall, according to Justia.com. A law firm was hired to bring a wrongful death action against the company responsible for maintaining the van.
During litigation, the defendant managed to get the court to exclude a pair of the plaintiffs’ key witnesses. The lawsuit was subsequently dismissed with no recovery.
Two years later, the children filed a professional negligence lawsuit against the law firm. The trial court ruled that the plaintiffs were not in privity with the defendant and had no standing to sue. This ruling was reversed on appeal.
The Kentucky Supreme Court held:
- There were issues of material fact regarding the attorney-client relationship.
- The firm owed a duty to the children.
- The children were “real parties in interest” to the wrongful death action.
“Reasonable Belief” of Representation
Here is how Professional Liability Matters analyzed the decision:
In reaching this conclusion the court reasoned that the existence of an attorney-client relationship is an issue of fact premised upon a party’s reasonable beliefs or expectations with regard to an attorney’s representation. The court concluded that based on the mother’s belief that the attorney was also representing her children, this raises a disputed fact sufficient to defeat a summary judgment motion.
Moreover, and importantly, the court concluded that the attorney owed a duty to the children based on their status as beneficiaries of the wrongful death claim. The court examined the state’s statute governing wrongful death actions and concluded that the claim belonged to the beneficiaries of the estate. According to the court, the children were the real parties in interest to the wrongful death claim and therefore intended beneficiaries with standing to file suit.
Liability To Third Parties
It is not always easy, or even possible, to enclose the attorney-client relationship in tidy brackets. Things that happen inside that bubble tend to spill out into the larger world. Third parties who rely on the lawyer’s words and deeds are sometimes affected.
- An auditor may be liable to non-clients who reasonably rely on an audited financial statement.
- A real estate closing attorney may be liable to the lender and perhaps other parties for furnishing an erroneous title opinion.
- An estate lawyer may be liable to remote beneficiaries.
Legal actions can have far-reaching – and sometimes unintended – consequences.
Minimize your risk of liability by using engagement agreements to clearly delineate the scope of your representation. Make it clear who you are representing.
Consider, too, if there are other parties who might be relying on your efforts. Is their reliance reasonable? Are there any steps you can take – other than doing a great job – to minimize your exposure to them?
Jay Reeves a/k/a The Risk Man is an attorney licensed in North Carolina and South Carolina. Formerly he was Legal Editor at Lawyers Weekly and Risk Manager at Lawyers Mutual. Contact firstname.lastname@example.org, phone 919-619-2441.