All right, this is admittedly a very dry subject.  However, this legal malpractice case arose after a federal class action securities case, and involves $ big money.  Here is the 2d Circuit Court’s decision, as reported in the Federal Civil Practice Bulletin.

Here is an article from Law.Com which tells the story of resignor Jay I. Gordon.  He resigned from the bar last month after admitting $2 million in kickbacks from tax shelters to whom he referred and sent clients.  The story. GT is also defendant in at least one legal malpractice case mentioned in the article.

Here is a sad report from Las Vegas.  Attorney Lawrence Davidson is a missing defendant in a Federal indictment which was to be tried starting October 30.  Defendant is charged with stealing $936,300 in settlement proceeds and taking off.  Apparently not everone stays in Las Vegas.

One  of the elements in legal malpractice is privity.  That term means, a contractual relationship.  Cllients often want to sue their opponent’s attorney, usually for the things they did for the opponent.  For the most part, one may sue only his attorney, the is, the attorney who was retained.

One exception comes up with opinion letters or due dilligence reports.  If a third party relies upon such letters or reports, even by an attorney whom they did not hire, and does so to a detriment, then there may be a close enough relationship for a legal malpractice case.

What happens when the plaintiff may or may not have been able to collect from the underlying defendant? In attorney malpractice, it is always the obligation of plaintiff  to prove that "but for" the negligence of the attorney, he would have had a successful or better outcome. What happens when the entity he would have successfully sued, "but for" the defendant attorney’s negligence, has gone out of business, or had no insurance, or its insurance carrier denied coverage?

Prior to <em>Lindenman v. Kreitzer</em> 7 AD3d 30 [1st Dept 2004] it was the obligation of plaintiff to prove collectability as a <strong><em>prima facie</em></strong> element of its direct case.

Now, however, it is defendant attorney’s burden to show an "avoidence or mitigation" that the judgment, hypothetical or real, was uncollectable. "The attorney should bear the inherent risks and uncertainties of proving it."

The attorney is required to prove uncollectability only for a "reasonable time", not 20 years.

A common law retaining lien entitles the outgoing attorney to retain all papers, securities, or money belonging to the client that came into the attorney’s possession in the course of representation, as security for payment of attorney’s fees. Arising from Judiciary Law 475, it is enforceable only by retention of the items themselves and is lost if the file or documents are no longer in the attorney’s possession.

A charging line similarly arises and attaches to any recovery and thus secures the attorney’s right to compensation. A hearing will be held to determine fees, based upon <em>Quantum meruit</em>.

<strong><em>Quantum meruit</em></strong> is the fair and reasonable value of the services rendered, which may be more or less than the amount provided in the contract or retainer agreement and is determined by "taking into consideration the character of the services, the nature and importance of the litigation, the degree of responsibility imposed or incurred, the amount or value involved, the length of time spent, the ability skill and experience required and exercised, the character, qualifications and standing of the attorney and the results achieved. The recovery is not limited to the amount billed, the original terms of the retainer agreement, and may be less or more than the amount which might have been recovered under a contingency fee or other measuring tools of fees.

Hinshaw & Culbertson LLP bring this case analysis and warning:

Washington Supreme Court Applies Ethical Prohibition Against Malpractice Waiver/Release Without Written Notice of Right to Independent Counsel to Situation Involving Only Potential Claims

In re Greenlee, ___ Wash. 2d ___, ___P3d___, 2006 WL 2852751 (2006)
The Washington Supreme Court interpreted the written notice provision in RPC 1.8(h) to apply to client waivers or releases of claims against the lawyer that are merely potential.

Michael Hoenig writes in todays NYLJ that a recent decision in toxic torts bears great scutiny.

"Put the New York Court of Appeals’ Oct. 17 decision in Parker v. Mobil Oil Corp.1 on your radar screen. Do not label this as yet another toxic tort case. Like a stealth bomber, it has some potential to evade close scrutiny yet deliver an explosive payload.

Unobtrusively, in what, at first glance, seems like just another disease-causation case resting on its own bottom, with its own set of facts, upon further study, Parker yields up quite a few practical insights. Certainly, if you are an attorney fortunate enough to battle in the sophisticated toxic tort arena, Parker is of obvious relevance.

Nevertheless, Parker can be instructive for all New York practitioners who rely upon retained experts whose scientific, technical or specialized knowledge opinions and methodologies may be questioned on reliability grounds. Indeed, Parker can be looked at on several levels. There is the straightforward story and holding on the facts of the case. Then, there are certain observations by the Court that exude significance beyond the case facts. And, finally, there are the gleanings one must pry out and extract as well as the need to recognize the questions left open. "

Avoiding mistakes in new law is a basic tenant in legal malpractice.