Reported on the front page of the NY Law Journal today is a $ 5 million dollar legal malpractice verdict and judgment that could swell to $ 10 million after interest.  in Friedman v. Boros, Justice Jaffe determined that the jury verdict will stand, and that pre-judgment interest in this commercial legal malpractice case commenced in 2000.  The case turned on collateral estoppel and arbitration.

"The court rejected defendants’ argument based on State Farm Ins. Co. v Smith, 277 AD2d 390 (2d Dept, 2000) and Kerins v. Prudental Prop. & Cas., 185 AD2d 403 (3d Dept 1992), and concluded that if plaintiff and Katz had entered into a limiting agreement, Mahoney Cohen would likely have not prevailed in asserting collateral estoppel as a defense in plaintiff‘f s action against it.
By decision and order dated April 26, 2005, the Appellate Division, First Department,
affirmed the September 2004 decision, finding that defendants had not “established as a matter of‘
law, that even if plaintiff and Katz had entered into an agreement limiting the collateral estoppel
effect of the arbitration award, the Mahoney Cohen lawsuit would nonetheless have been
dismissed on collateral estoppel grounds.” (17 AD3d 275, 276). ‘I’he If the Court, citing Smith, also
observed. that “in circumstances involving arbitration, the parties themselves can formulate their
own contractual restrictions on the carry-over estopple effect.” (Id.).

Defendant was found liable for both legal malpractice and accouting malpractice in a mid 7 figure judgment.