Legal Malpractice insurance coverage is generally a “claims made” type. Here is a typical case, now in the NJ Supreme Court. The issue is whether a claim, within the policy period, is covered. Ins. Co. says no, the events took place prior to policy period. Attorney says yes, claim came during policy, and I had no real reason to know the suit would come later. Details.

Good cause for termination is not the same as malpractice. Attorney malpractice, the deviation from good and accepted practice, which proximately damaged the party, in which, but for the negligence of the attorney there would have been a different or better result is not the same as good cause for termination. Termination for cause has arisen in many situations in which malpractice was not even discussed, much less claimed. Substantial delays in prosecuting the case, failure timely to obtain medical records, failure to retain an employment [which] contravenes specific legal requirements is sufficient, abandonment of a case, a conflict of interest, a refusal personally to try a case, a failure to disclose a settlement offer, are all examples of misconduct which does not amount to malpractice.

The difference flows logically from the question of damages. In malpractice there is a positive claim for damages, over and above fee considerations from the attorneys; in the question of termination for cause, there can be but a reduction of the fees paid, but no positive claim for damages. As one might expect, the burden of proof for malpractice requires much more than the burden of proof to decide between “good cause” and “no cause”

This Illinois case, reported by Jerry Megne and Cassandra Crotty of the Illinois Legal Malpractice Blog, shows the interaction of three limitation periods, and the resultant vital legal malpractice case which arose from a botched medical procedure followed by a botched legal proceedings. Tolling for infancy, the statute of limitations and the statute of repose all end with a important finding: In Illinois an attorny may not sit back, keep the mistake to himself, and wait out the S/L. Details.

In general, privity is required before an attorney may be held liable in legal malpracitce. Sometimes, the attorney may be held for advice, especially opinion letters, to 3d parties, who did not hire the attorney, but relied upon the advice. Here is a case, reported by the Hinshaw firm, which restates the principal.

Mega Group, Inc. v. Pechenik & Curro, P.C., 819 N.Y.S. 796 (2006)
The court held that while the opinion letter provided in this corporate transaction did create a duty to the third party purchaser, the duty was not violated when the opinion letter contained only the information requested in the sales agreement and did not address the issue in controversy.

The Hinshaw memohttp://www.hinshawlaw.com/knowledge/alert_detail.aspx?id=973&type=5303

This is always a hovering problem. In NY there is no effective way to determine whether the target attorney has coverage prior to bringing suit. When the target has no legal malpractice coverage, one may expect any amount of twisting and turning to avoid the claim. Bankruptcy is possible, and I have had three cases end there. Here is a case and article from West VA where the attorney successfully avoided the claims, and was disbarred. Details.

Here is a fresh NJ Legal Malpractice Case about a H-W securities fraud case which morphed into a legal malpractice case. Of interest? A discussion of limited retainer agreements, limiting the scope of legal representation, whether these limited retainer agreements need to be in writing, and how to do so in New Jersey. Full case.