Legal Malpractice in Texas: The Basics 2010
LEGAL MALPRACTICE LAW REVIEW
is pleased to present
Paul M. Koning
Brent Basden
of
K & L Gates, LLP
LEGAL MALPRACTICE IN TEXAS--THE BASICS, April, 2010
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This article presents great information about legal malpractice issues, claims, damages, and defenses in Texas. It provides great insight covering both sides of a legal malpractice claim.
One specific area that I wish to comment on is the “privity” requirement. The privity requirement is one where the Plaintiff must prove the existence of an attorney-client relationship to establish the element of duty. Although there are limited exceptions to this rule in Texas, one area that the privity rule is still required is in the estate-planning context. I find this curious since the majority of states have relaxed this rule in the estate-planning context. The Texas Supreme Court has addressed this issue in many opinions and has held that beneficiaries of a decedent’s estate may not sue the decedent’s lawyer for negligent estate planning. However, members of the Texas Legislature have taken an initiative to change this. In 2001 during the 77th Texas Legislature, House Bill 19 was introduced which would require attorney disclosure of Executor breaches and would permit beneficiaries to sue attorneys. This bill is polar opposite of recent Texas Supreme Court cases upholding the attorney-client privilege in estate planning and fiduciary cases. Also in 1999, House Bill 3580 was introduced which would have established an attorney-client relationship between an executor’s or administrator’s attorney and the estate beneficiaries. Although neither bill passed, legislators are clearly trying to make changes that the Texas Supreme Court has been unwilling to make. I am curious to see if someday Texas legislators pass legislation that will change the privity requirement in the estate-planning context. If this occurs, can the Texas Supreme Court do anything about it? Should legislators be getting involved in legal malpractice issues such as this? What happens when passed legislation conflicts with Texas Supreme Court rulings?
Mr. Opperman raises some very interesting questions about the conflict between state legislation and state supreme court decisions. The answer may turn on whether the high court would be willing to use its inherent authority to regulate the legal profession. For example, in the past the Georgia Supreme Court used its inherent power when considering legislation related to lawyers practicing in professional corporations. Although the Georgia Supreme Court took a different position years later, there is always a possibility that a high court might use its inherent power. In the case of legislation extending protection to injured persons, jurists may be reluctant to use inherent power in a way that would provide more protection to lawyers.
New Jersey may soon be facing a similar problem of which branch will have the final say: Legislature or Judiciary? The NJ State Bar Association has sponsored legislation that seeks to legislatively abrogate a NJ Supreme Court decision called Saffer v. Willoughby which holds that a prevailing plaintiff in a legal malpractice case is entitled to collect as consequential damages the cost of hiring a lawyer to successfully prosecute the legal mal action. The Texas Supreme Court reached a somewhat similar conclusion in the Akin Gump v. NDR decision last October 2009.
Query: If the NJ State legislature passes that bill, will it be infringing on the NJ Supreme Court's nearly exclusive constitutional power to regulate the practice of law and the legal profession? The bill, called the Professional Services Business Enhancement Act died in committee during the last legislative session, but it has been re-introduced and is now awaiting action.
The insurance industry favors the bill and criticizes the award of consequential damages as "fee shifting". Groups such as the AARP and the American Association for Justice, the plaintiff-trial lawyers group, oppose it.
If a client, wronged by a lawyer's malpractice, has to hire another lawyer to fix the damage caused by the first lawyer, shouldn't that cost be tacked on as consequential damages?
If a patient is injured by a surgeon's malpractice, and a new surgeon has to be hired to fix the damage of the first, shouldn't those additional medical bills be consequential damages?
Why are a lawyers fees to fix the damage of a lawyer's malpractice any different from the fees of a subsequent treating physician whose treatment fixes the damage caused by the first doctor?
I appreciate Mr. Koning's thoughtful article on the nature of legal malpractice in Texas. I did have a question about standard of care. The author states, quite correctly, that the standard of care for an attorney in malpractice suit is that which "would be exercised by a reasonably prudent attorney."
My question relates to the duty of care. It is my understanding that the duty of care is different than the standard of care (which is always reasonableness). But, depending on various factors and circumstances, the duty can change (yet, still always remain reasonable). My question, finally, is whether an attorney's duty of care is lower if he is a probono attorney. That is, if the attorney is not getting paid for his work, is the duty of care different (ie, lower) than that imposed on an attorney that is getting paid?
Fiduciaries owe their principal a certain duty of care. But does the duty change when the fiduciary is doign the work for free?
Make sense?
I'd like to thank Mr. Koning for posting this article. I found it to be a very informative and well written description of legal malpractice in Texas. I especially enjoyed the section on the standard of care lawyers are held to. One of my big areas of interest is on the standard of care and how that has evolved and continues to evolve.
In your article you mentioned how the locality rule followed in Texas is much criticized. Personally, I am critical of the locality rule as well but I don't believe it is as major concern as it once was. Advances in technology have allowed lawyers in "one horse towns" access to the same or similar data available to big firms in Houston. As this technology and information becomes more affordable and accessible, the standard of care lawyers throughout the state are held to may move towards more uniformity.
Furthermore, it seems like the standard of care is heightened by the growing complexity of disciplinary rules. Even though the Texas Supreme Court has not stated if disciplinary rules can prove the standard of care, many lower courts in Texas give incredible weight to the rules when determining a particular legal community's standard of care. Logically then, as more rules are promulgated and current rules are expanded, the standard of care should increase accordingly. Because the disciplinary rules apply to lawyers throughout Texas, the gulf between standards for small town lawyers and big city lawyers may be shrinking.