Theories of Liability

One course of conduct can support several claims against a lawyer. “Legal malpractice” serves as an umbrella for the various professional liability claims against lawyers, including claims for negligence, breach of fiduciary duty, and negligent misrepresentation, although cases and commentators often use the phrase to mean negligence alone.¹ A client who holds an express promise from the lawyer may also sue in contract.² Because the same facts often fit more than one theory, a plaintiff may plead several, and a judgment on one can survive an affirmative defense that defeats another.³

The theories differ first in the fault they require. Apart from claims based on contract breaches and vicarious liability, lawyers are not strictly liable for their acts and omissions. The plaintiff ordinarily must show that the lawyer intended to cause harm or failed to use reasonable care to prevent foreseeable losses, and a failure of care is either negligent or reckless. Recklessness is the more culpable, reflecting extreme lack of care or conscious indifference to a known risk of harm to others.⁴

Theory also shapes the rest of the lawsuit. The client’s own carelessness may be raised against a negligence claim but not against a claim based on intentionally tortious conduct, and whether it is a defense to a claim that the lawyer acted recklessly depends on state law. When a fiduciary claim rests on a lawyer’s business transactions with a client, the court may shift the burden of proof to the lawyer, treating the transactions as presumptively fraudulent or requiring the lawyer to show they were fair to the client. Limitations periods may differ by theory, although some states apply a single period to every action against a lawyer for professional conduct.⁵ Remedies and money differ as well. Fiduciary theories support equitable remedies such as fee forfeiture, constructive trusts, and disgorgement of profits; the plaintiff’s ability to recover attorneys’ fees depends on the theory; a judgment for misappropriating entrusted funds is likely to be nondischargeable in bankruptcy, while one for negligent handling of trust funds may be dischargeable; and common policy exclusions eliminate coverage for intentional torts.⁶

Courts look past labels. Most ask for the “essence,” “gist,” “substance,” or “real nature” of the claim, and a court may conclude that, whatever the pleading calls the cause of action, the case is essentially a tort action for malpractice. In jurisdictions that permit multiple causes of action, the plaintiff must show that the gravamen of each claim, meaning its central substance, rests on an independent basis of liability. A defendant may ask the court to dismiss a count on the ground that the plaintiff is “fracturing” one malpractice claim into several, and dismissal can leave the plaintiff with nothing when the surviving count is time-barred but the dismissed count would not have been.⁷

For this course, the label usually changes less than it seems. In most cases it makes no substantive difference whether a malpractice claim is called negligence or breach of fiduciary duty, though in some states it may affect the limitations period, and a malpractice claim can usually be analyzed as one for negligence.⁸ The differences above matter at the margins: where a limitations period is about to run, where funds have been taken, or where a policy excludes intentional acts. The four subsections below take the theories in turn, starting with negligence.

Negligence

Restatement (Second) of Torts § 281 states when an actor is liable for invading another’s interest, and its four conditions supply the skeleton of a negligence claim against a lawyer.⁹ Each condition lines up with an element from first-year torts:

Duty corresponds to the condition that the interest invaded be one the law protects against unintentional invasion.¹⁰ For a lawyer, the duty of care typically rests on an attorney-client relationship.¹¹
Breach corresponds to the condition that the lawyer’s conduct be negligent with respect to the client, or a class of persons that includes the client.¹²
Causation corresponds to the condition that the lawyer’s conduct be a legal cause of the invasion.¹³ Proximate cause requires a reasonably close connection between the lawyer’s departure from the duty of care and the harm the client suffered.¹⁴
The client’s own conduct corresponds to the condition that the client not have so conducted himself as to disable himself from bringing the action.¹⁵

The classroom elements of duty, breach, causation, and damages differ slightly from this list: § 281 gives damages no clause of its own and adds a condition about the client’s conduct. A malpractice plaintiff must still prove damages along with proximate cause,¹⁶ and that element requires deciding which type of damages the cause of action allows and how to measure them.¹⁷ Duty and breach alone therefore do not complete a claim. The client must also tie the lapse to a loss, which is why causation and damages receive sections of their own below.

A client’s loss from careless legal work is often purely economic. A negligence action is permitted for pure economic harm when the defendant owes the plaintiff a duty of care because of an undertaking or special relationship, and legal malpractice claims are examples.¹⁸

The breach condition asks what the law demands of a lawyer. Lawyers owe their clients reasonable care, and more precisely the care a reasonable professional would provide in similar circumstances: the question is what a reasonable lawyer would do, not what an ordinary reasonable person would do. Restatement (Third) of the Law Governing Lawyers § 52(1) frames the standard as the competence and diligence normally exercised by lawyers in similar circumstances.¹⁹ The usual definition of legal malpractice says the same thing in different words: a lawyer’s failure to render professional services with the skill, prudence, and diligence that an ordinary and reasonable lawyer would use under similar circumstances.²⁰ The test is objective. As in medical malpractice, to which the lawyer’s claim is closely analogous, good intentions are no answer, because conduct is measured against how the average, or at least minimally qualified, practitioner would perform under like circumstances.²¹

Section 282 defines the conduct the breach condition requires. Negligence is conduct that falls below the standard the law establishes for protecting others against unreasonable risk of harm, and the definition excludes conduct that recklessly disregards an interest of others.²² The exclusion matters because a number of issues turn on how culpable the lawyer was.²³ Whether a client’s own carelessness is a defense to a claim that the lawyer acted recklessly, for example, depends on state law.²⁴

A bad outcome does not prove a breach. A professional is ordinarily liable only for negligence because the service performed carries no guaranteed result.²⁵ The client in Tarrant v. Ramunno alleged that the initial demand in her personal injury case was $20,000 but that the case settled for much less after mediation.²⁶ That allegation describes an outcome, and an outcome says nothing about whether the lawyer’s conduct met the standard. The law itself imposes the duty of ordinary professional skill, so no engagement letter needs to promise it, while a promise of a particular result belongs to the contract theory below.²⁷

Courts find liability most readily on facts like these because the lapse is mechanical rather than discretionary. Filing before the limitations period runs involves no weighing of options, so no exercise of professional judgment stands between the omission and the lawyer’s responsibility for it.²⁸ The Tarrant client, by contrast, complained only of a result.

Breach of Fiduciary Duty

Negligence asks how well the lawyer worked; a fiduciary claim asks whom the lawyer was serving. One appellate court drew the line in just those terms, concluding that the negligence claim related to the duty of a reasonably prudent attorney under the same and similar circumstances, while the claim for breach of fiduciary duty rested on an assertion of the attorney’s self-interest and conflict of interest.³⁰ A client may therefore sue for breach of fiduciary duty where the lawyer put his own interest ahead of the client’s, as in a conflict of interest, a business transaction with the client, or the misappropriation of entrusted funds.³¹ A lawyer can work competently and still be disloyal, and the fiduciary claim reaches that disloyalty.

The client has a fiduciary claim here, because the wrong is self-interest rather than a failure of care.³² The choice of theory also matters after judgment. A judgment resting on misappropriated funds is likely to be nondischargeable in bankruptcy, while a judgment for merely negligent handling of trust funds may be dischargeable.³³

Because the same facts often support both theories, plaintiffs frequently plead negligence and fiduciary breach together, and the second theory may save the case. A fiduciary claim may carry a longer limitations period than a negligence claim, so a plaintiff whose negligence claim is time-barred can still recover on it.³⁴ Courts do not credit a second label that adds nothing, however, and they examine the gravamen of each count.

A court may refuse to recognize the distinction and treat the whole case as a malpractice tort, and a defendant may move to dismiss the fiduciary count as an improper fracturing of one claim.³⁵ Missing a deadline is a failure of care, and calling it disloyalty does not change what it is. The misappropriated settlement funds in the first scene are different, because they show self-interest whether or not the lawyer’s bookkeeping was also careless. A count survives when it rests on an independent basis of liability, such as the lawyer’s self-interest or conflict of interest, rather than on the care a reasonably prudent attorney would have used.³⁶

The fiduciary theory also changes burdens and remedies. When the claim rests on a lawyer’s business transactions with a client, the court may shift the burden to the lawyer, treating the transactions as presumptively fraudulent or requiring the lawyer to demonstrate that they were fair to the client.³⁷ Fiduciary theories support equitable remedies, namely fee forfeiture, constructive trusts, and disgorgement of profits, which take back what the lawyer gained, and the plaintiff’s ability to recover attorneys’ fees depends on the theory pleaded.³⁸

Contract Claims

A contract claim asks whether the lawyer kept a promise, while a negligence claim asks whether the lawyer used reasonable care. The difference rarely matters for ordinary skill, because the law rather than the engagement agreement supplies that duty: there is no need to contract specifically for it.⁴⁰ A client who sues for careless work need not point to any term of the agreement, since the duty of care arises from the lawyer’s undertaking and special relationship with the client, and a negligence action lies for the resulting economic harm.⁴¹

Contract matters when the lawyer promised more than ordinary skill. A service provider may choose to give a guarantee, which is enforceable through contract law, while absent an express contract for a particular result the cause of action lies in tort.⁴² Contract is also one of the two settings in which a lawyer can be liable without fault, since apart from contract breaches and vicarious liability, lawyers are not strictly liable.⁴³ The plaintiff who proves the promise and its breach need not prove that a careful lawyer would have kept it.

The agreement contains a specific promise of a kind the client can enforce in contract, and the lawyer broke it.⁴⁴ The same omission also supports a negligence claim, because failing to file before the limitations period runs is the prime example of a mechanical lapse, and the client may plead both theories.⁴⁵

The line between a promise and a prediction decides whether the contract route opens at all. In McComas v. Bocci, the attorney denied making the statement at issue, and the court found that the statement, if made, was a gratuitous prediction that the attorney had no contractual duty to produce.⁴⁶ The promise to file names a specific act whose omission is the client’s whole complaint. A prediction about the outcome names no deliverable against which a breach could be measured, and it leaves the client with whatever tort claim the lawyer’s conduct supports.

A plaintiff sometimes prefers the contract label because of the limitations period. If the period is longer for breach of contract than for a tort claim, the plaintiff may try to characterize the claim as contract.⁴⁷ The attempt has a ceiling, because a court that looks to the essence of the claim may treat a count that merely restates the duty of care as the malpractice tort it is.⁴⁸

Misrepresentation and Fraud

A lawyer’s words can injure a client as surely as careless legal work, and two kinds of false statement must be kept apart because they differ in culpability. A careless misstatement is negligent misrepresentation, one of the claims the term legal malpractice covers.⁵⁰ A deliberate falsehood is intentional wrongdoing, and the consequences follow the theory.

The careless misstatement follows the negligence pattern. A client’s loss from relying on wrong information is often purely financial, and a negligence action is permitted for pure economic harm when the defendant owes the plaintiff a duty of care because of an undertaking or special relationship; legal malpractice claims are examples.⁵¹ As in any malpractice claim, the plaintiff must also prove proximate cause and damages, so the false statement must be tied to a loss.⁵²

A knowing lie sits outside negligence. The definition of negligence excludes even conduct that recklessly disregards another’s interest,⁵³ and a plaintiff may instead establish that the lawyer intended to cause harm.⁵⁴ The client’s own carelessness is no defense to a claim based on intentionally tortious conduct,⁵⁵ and because common policy exclusions eliminate coverage for intentional torts, plaintiffs’ attorneys often add at least one covered claim, such as negligence or breach of fiduciary duty.⁵⁶

In the first version the claim is negligent misrepresentation, and in the second it is intentional misrepresentation. In both, the failure to file is itself the mechanical lapse that supports negligence.⁵⁷ The second version differs in one practical respect: the client’s failure to double-check the docket gives the lawyer no defense, because the client’s own carelessness does not answer a claim based on intentionally tortious conduct.⁵⁸

Some breaches need no expert. An Alabama appellate court held that a lawyer’s failure to notify a client of a ruling in time to appeal was so apparent a breach that expert testimony was not required, and the Alabama Supreme Court earlier held expert testimony unnecessary where a lawyer allegedly lied to a client about his experience by falsely stating that he had handled earlier breast implant litigation.⁵⁹ The rules of proof are taken up in a later section.

Every statement the lawyer made was true, so no misrepresentation exists. The client has shown only disappointment, and a negligence theory would require proof that the lawyer’s work fell below the standard of care.⁶⁰ The misrepresentation theory needs a statement that is actually wrong, or information carelessly supplied, that causes the client a loss.