Legal Malpractice Settlements: What a Claim Against Your Lawyer Is Worth and How to Prove It

What legal malpractice is, and what it is not

The four elements, and the case within a case

A legal malpractice claim is a negligence claim, and you must prove every element. The third one, causation, is what makes these claims different from any other lawsuit.

• Duty: an attorney-client relationship existed

  The lawyer owed you a duty of care because you were the client. A signed engagement letter is the simplest proof, but a duty can arise from conduct, such as a lawyer who gave you advice you relied on. Some states extend the duty to intended beneficiaries of a will or trust; most do not extend it to the opposing party.

• Breach: the lawyer fell below the standard of care

  The lawyer did something a reasonably competent lawyer would not have done, or failed to do something one would have done. In nearly every state you prove this through an expert witness, another lawyer who testifies to what the standard required. The exception is an error so plain that no expert is needed, such as a missed limitations deadline.

• Causation: the case within a case

  You must show that, but for the lawyer’s error, you would have obtained a better result. For a lost lawsuit, that means proving to the malpractice jury that you would have won the original case and collected a judgment; for a botched transaction, it means showing the deal you would have made. The malpractice trial re-tries the underlying matter, with the same evidence and the same defenses the original opponent would have raised.

• Damages: a measurable loss

  The error must have cost you money or property you can quantify: the judgment you would have collected, the money you paid because of bad advice, the inheritance a defective will failed to deliver. Distress about the experience is not enough on its own in most states. No damages, no claim, however clear the breach.

What a legal malpractice settlement consists of

The settlement figure is built from the value of what the lawyer lost for you, adjusted for what you could actually have collected, and sometimes the fees you paid. The lawyer’s malpractice insurer will contest every piece.

Filing deadlines: discovery and continuous representation

Every state sets a limitations period for suing a lawyer, and the chart below shows the general professional-malpractice deadline our database records for each state. The starting point matters as much as the length. Under the discovery rule, which most states apply in some form, the clock does not start until you knew or reasonably should have known of the error and the harm it caused. Under the continuous-representation doctrine, recognized in many states, the clock is paused while the same lawyer keeps representing you in the same matter, on the theory that a client should not have to sue a lawyer mid-case. Some states also impose an outside limit, a statute of repose, that ends the claim a fixed number of years after the error no matter when it was discovered.

How to build a legal malpractice claim

1. 1

   Get your complete file

   You are entitled to your client file, and in most states the lawyer must turn it over on request whether or not the bill is paid. Ask in writing for everything: pleadings, correspondence, notes, billing records, the engagement letter and the settlement documents. The file is the primary evidence of what the lawyer did and when.

2. 2

   Fix the dates

   Write down when the error happened, when you first learned of it, when the representation ended, and every deadline in the underlying matter. These dates decide whether the claim is timely under the discovery rule, the continuous-representation doctrine and any statute of repose.

3. 3

   Get an expert opinion on the standard of care

   Because breach is proven by expert testimony in almost every state, a malpractice lawyer will usually have another practitioner review the file before filing, and some states require an expert’s certificate of merit with the complaint itself. The review also tests the case within a case: whether the underlying matter was winnable and what it was worth.

4. 4

   Consider a tolling agreement

   If the deadline is close and the underlying matter is still unresolved, the parties can sign a tolling agreement that pauses the limitations period for a set time. It must be in writing and signed before the period expires; never rely on a verbal promise not to raise the deadline.

5. 5

   Decide between a bar complaint and a lawsuit, or both

   A complaint to the state bar or disciplinary board can lead to discipline, and produces a written response you can use, but it does not pay you damages. Recovering money takes a civil suit, or a claim against the bar’s client protection fund where a lawyer took client money. A bar complaint does not extend the deadline to sue.

6. 6

   Present the case within a case to the insurer

   Most practicing lawyers carry professional liability insurance, and the insurer will evaluate and negotiate the claim. Insurers settle claims with a clear breach and provable underlying value; a demand letter with the expert review and the damages documented is what shows them both.

What the numbers look like

The frame is the value of the case your lawyer lost, reduced by what you received and by collectability, then the fee questions your state decides. The figures below are invented to show the structure.

• Start with the underlying case

  What a reasonable verdict or settlement would have been, proven with the evidence the original case would have used. A malpractice claim is never worth more than the case behind it.

• Subtract what you got and what you could not have collected

  The settlement actually paid, if any, and the portion of a judgment the original defendant could never have satisfied.

• Resolve the fee questions

  Whether fees and costs paid to the negligent lawyer come back, and whether the contingency fee that would have come out of the original recovery is subtracted.

• Leave punitive damages out of the frame

  They require intentional misconduct and are unavailable in many states even then. Plan the claim around compensatory loss.