This is not an entirely new phenominon, nor totally unexpected, but this article relates how carriers and excess carriers are starting to bring legal malpractice law suits after unsuccessful [in this case read: payout] outcomes.

Author: Baldwin, Susan McParland; Breen, Lisa C.

"Malpractice suits by insurance companies against their defense attorneys are increasing. There are two reasons for this phenomenon: the waning of the long-term relationship between insurance companies and their outside counsel and the increased cost-consciousness of these companies. The courts have allowed primary carriers to sue on equitable subrogation or direct duty principles, while some suits by excess carriers have been allowed on the theory that negligent legal advice to the insured caused the settlement to tap the excess policy. The issue has not been conclusively decided."

This is not strictly legal malpractice, but we wanted to report on this new statute.  Indiscriminate use of youthful offender, or other sealed records of ACDs, dismissals are a frequent problem for attorneys.  What are the rules?  When do these arrest [but not conviction] records surface?  What does a parent do for a kid who has a youthful indiscretion which results in an ACD ?

CH. 639. S.3092. SIGNED BY GOVERNOR 8/28/07. EFFECTIVE 11/1/07. AMENDS §296, EXECUTIVE LAW. RELATES TO UNLAWFUL DISCRIMINATORY EMPLOYER PRACTICES CONCERNING YOUTHFUL OFFENDERS AND PERSONS CONVICTED OF VIOLATIONS.

BILL TEXT:

STATE OF NEW YORK ________________________________________________________________________ 3092 2007-2008 Regular Sessions IN SENATE February 22, 2007 ___________ Introduced by Sen. VOLKER — read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Govern- ment Operations AN ACT to amend the executive law, in relation to unlawful discriminato- ry employer practices concerning youthful offenders and persons convicted of violations The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Subdivision 16 of section 296 of the executive law, as 2 amended by chapter 208 of the laws of 1985, is amended to read as 3 follows: 4 16. It shall be an unlawful discriminatory practice, unless specif- 5 ically required or permitted by statute, for any person, agency, bureau, 6 corporation or association, including the state and any political subdi- 7 vision thereof, to make any inquiry about, whether in any form of appli- 8 cation or otherwise, or to act upon adversely to the individual 9 involved, any arrest or criminal accusation of such individual not then 10 pending against that individual which was followed by a termination of 11 that criminal action or proceeding in favor of such individual, as 12 defined in subdivision two of section 160.50 of the criminal procedure 13 law, or by a youthful offender adjudication, as defined in subdivision 14 one of section 720.35 of the criminal procedure law, or by a conviction 15 for a violation sealed pursuant to section 160.55 of the criminal proce- 16 dure law in connection with the licensing, employment or providing of 17 credit or insurance to such individual; provided, however, that the 18 provisions hereof shall not apply to the licensing activities of govern- 19 mental bodies in relation to the regulation of guns, firearms and other 20 deadly weapons or in relation to an application for employment as a 21 police officer or peace officer as those terms are defined in subdivi- 22 sions thirty-three and thirty-four of section 1.20 of the criminal 23 procedure law; provided further that the provisions of this subdivision EXPLANATION–Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD05179-04-7 S. 3092 2 1 shall not apply to an application for employment or membership in any 2 law enforcement agency with respect to any arrest or criminal accusation 3 which was followed by a youthful offender adjudication, as defined in 4 subdivision one of section 720.35 of the criminal procedure law, or by a 5 conviction for a violation sealed pursuant to section 160.55 of the 6 criminal procedure law. 7 § 2. This act shall take effect on the first of November next succeed- 8 ing the date on which it shall have become a law.

This Law.Com article describes a star attorney who is now a defendant in a legal malpractice suit in Washington DC. 

"Renowned Washington, D.C., litigator Michele Roberts has the kind of reputation that makes other attorneys salivate with envy.

"She mesmerized juries," says Wiley Rein partner Barbara Van Gelder, who worked for the U.S. Attorney’s Office when Roberts was arguably one of the best public defenders in D.C. "She was, to me, one of my most feared adversaries."

Still, there is one case that the seemingly infallible Roberts has not been able to win. It began nearly six years ago as a simple matter, one she agreed to handle as a favor to a federal judge. It has since given rise to a $5 million legal malpractice claim filed against her by a former client.

Vaughn Stebbins, whom Roberts represented in a civil case against the District of Columbia and a Metropolitan Police Department officer, claims that the superstar litigator botched his chance to recover damages for injuries he received after being shot nine times by the police officer in 1998. Stebbins accuses Roberts of blowing deadlines and failing to properly serve a key defendant — mishaps that led to the dismissal of his case.

Roberts isn’t the only defendant in the D.C. Superior Court case. Stebbins has also sued solo practitioner Steven Kiersh and Goodwin Procter, the firm that absorbed Shea & Gardner, where Roberts once worked.

In motions for summary judgment filed in June, Roberts and Kiersh argue that it is irrelevant whether their slip-ups led to Stebbin’s case being dismissed, because a reasonable jury would never have sided with him.

Yet that defense has placed the two lawyers in the awkward position of having to tear apart their original case and discount deposition testimony given by the expert witnesses that Kiersh had assembled.

Last month, Stebbins’ lawyers — Richard Swick and David Shapiro of Swick & Shapiro — filed their own motion for partial summary judgment, alleging that Roberts and Kiersh’s negligence was so straightforward that the matter is undisputable.

David Dorfman was a legal malpractice defendant, and then got on the bad side of Federal Judge Denise Cote.  He did not pay the judgment, and eventually, Judge Cote referred the case to the US Attorney.  Here is the result from the NYLJ:

"Attorney Pleads Guilty to Contempt of Court

A lawyer who violated a court order governing management of his law practice following a malpractice verdict has pleaded guilty to contempt of court. David A. Dorfman, who lost a $385,000 malpractice case because he had exaggerated his legal experience and then missed a routine filing deadline in a civil case, repeatedly frustrated the plaintiff and then Southern District Judge Denise Cote as he dragged his heels in paying the judgment. The plaintiff, Ricky Baker, had hired Mr. Dorfman in 1994 to sue New York City after he had been misdiagnosed as HIV-positive, but Mr. Dorfman missed the one-year-and-90-day deadline for filing. On Monday, just a week before his contempt trial was to begin, Mr. Dorfman admitted to violating Judge Cote’s order that enjoined him from hiring new staff without the consent of plaintiff’s counsel or leave of the court. The contempt prosecution was brought after Judge Cote asked the U.S. attorney’s office to bring charges in 2006. Mr. Dorfman faces a maximum of six months in prison when he is sentenced Dec. 7. – "

A fee arbitration notice is an absolute condition precedent, and must have been given to the client before starting an attorney fee lawsuit.  Here is a case from today in which a client "wins" the County bar fee arbitration, and the attorney seeks a de novo trial, only to have the case dismissed.

"PLAINTIFF LAW firm commenced this action against defendant client alleging defendant failed to pay for legal services rendered. Plaintiff moved for an order permitting it to file an amended summons and complaint asserting an action for a de novo review of the decision of the county bar associations fee dispute arbitration program. Defendant cross-moved for dismissal alleging the original summons and complaint was a nullity as plaintiff failed to offer defendant fee arbitration as required by the Part 137 Rules. The court agreed, ruling any covered action under 22 NYCRR §137.1(b) brought without having previously offered the client fee dispute resolution was a nullity"

Here is a case in which plaintiff was injured in a construction accident, and lost the case when it was discovered that the wrong parties were sued.  He turns to legal malpractice case, and avoids summary judgment in this decision.Hershorn v Grae, Rybicki & Partners, P.C. ,2007 NY Slip Op 06458 ,Decided on August 21, 2007 ,Appellate Division, Second Department

"The Supreme Court properly denied the defendants’ motion for summary judgment dismissing the complaint. The issue of whether or not Dinaso could be held liable for the damages alleged in the underlying action was not raised and necessarily determined in the underlying action (see Pinnacle Consultants v Leucadia Natl. Corp, 94 NY2d 426; Gramatan Home Invs. Corp. v Lopez, 46 NY2d 481). Rather, the only issue necessarily determined was that the parties against whom the action was timely commenced, which did not include Dinaso, neither created nor had actual or constructive notice of the alleged dangerous and defective condition caused by the sheetrock. Accordingly, the issue of whether or not the plaintiffs would have prevailed in the underlying action but for the alleged negligence of the defendants in identifying and timely commencing the action as against Dinaso was not raised and necessarily determined in the underlying action, and dismissal of the action at bar was not warranted. "

Cleary Gottlieb may have gone too far, reports Anthony Lin at the NYLJ when it spoke with a potential deposition witness.  Did they represent the Congo too strongly?

"Manhattan federal judge has sanctioned Cleary Gottlieb Steen & Hamilton for improperly trying to dissuade a witness from testifying about his dealings with the Republic of Congo, which the New York law firm is representing in a dispute with a foreign hedge fund.

In a opinion issued last week, Southern District Judge Loretta Preska said Cleary had acted in "bad faith" by contacting witness Médard Mbemba, a French-Congolese businessman and onetime close friend of Congolese President Denis Sassou-Nguesso, and telling him his participation in a deposition could "destabilize" or "hurt" Congo.

The judge also credited later testimony by the witness that he felt threatened by the warnings delivered by Cleary partner Jean-Pierre Vignaud, because he knew the lawyer had "privileged connections" in the Congolese government.

"[Cleary] has shown a willingness to operate in the murky area between zealous advocacy and improper conduct, and here it crossed the line," Judge Preska wrote in Kensington International Ltd. v. Republic of Congo, 03 Civ. 4578. She ordered that a formal reprimand be circulated to all of Cleary’s 950 lawyers and that the firm be assessed the attorney’s fees for the sanctions motion. "

We have always thought that legal malpractice cases, with the "case within a case"  format were a wee bit more difficult than other litigation.  We had not factored in a "secret bias" aspect.

Federal Judge Dennis Jacobs thinks a little bit differently:

"Dennis G. Jacobs, the chief judge of the federal appeals court in New York, is a candid man, and in a speech last year he admitted that he and his colleagues had “a serious and secret bias.” Perhaps unthinkingly but quite consistently, he said, judges can be counted on to rule in favor of anything that protects and empowers lawyers.

Once you start thinking about it, the examples are everywhere. The lawyer-client privilege is more closely guarded than any other. It is easier to sue for medical malpractice than for legal malpractice. People who try to make a living helping people fill out straightforward forms are punished for the unauthorized practice of law.

But Judge Jacobs’s main point is a deeper one. Judges favor complexity and legalism over efficient solutions, and they have no appreciation for what economists call transaction costs. They are aided in this by lawyers who bill by the hour and like nothing more than tasks that take a lot of time and cost their clients a lot of money. "

"This month, a New Jersey appeals court basically immunized lawyers from malicious prosecution suits in civil cases. Even lawyers who know their clients are pushing baseless claims solely to harass the other side are in the clear, the court said, unless the lawyers themselves have an improper motive.

Lester Brickman, who teaches legal ethics at Cardozo Law School, said the decision was just one instance of a broad phenomenon.

“The New Jersey courts have determined to protect the legal profession in a way that no other professions enjoy,” Professor Brickman said. “It’s regulation by lawyers for lawyers.”

Other professions look for elegant solutions. It is the rare engineer, software designer or plumber who chooses an elaborate fix when a simple one will do. The legal system, by contrast, insists on years of discovery, motion practice, hearings, trials and appeals that culminate in obscure rulings providing no guidance to the next litigant.

Last month, Judge Jacobs put his views into practice, dissenting from a decision in a tangled lawsuit about something a college newspaper published in 1997. The judges in the majority said important First Amendment principles were at stake, though they acknowledged that the case involved, at most, trivial sums of money.

Judge Jacobs’s dissent started with an unusual and not especially collegial disclaimer. He said he would not engage the arguments in the majority decision because “I have not read it.”

He was, he said, incredulous that “after years of litigation over $2, the majority will impose on a busy judge to conduct a trial on this silly thing, and require a panel of jurors to set aside their more important duties of family and business in order to decide it.”

Writing with the kind of verve and sense of proportion entirely absent in most legal work, Judge Jacobs concluded that “this is not a case that should occupy the mind of a person who has anything consequential to do.”