What is Legal Malpractice?
Legal malpractice refers to the breach of the attorney-client relationship due to negligence or failure to perform competently. It hinges on the premise that attorneys owe a standard of care to their clients and, if violated, the client may be entitled to recover damages.
Some common examples of legal malpractice may include:
- Failing to file a lawsuit before the statute of limitations runs out
- Missing an essential filing or court date
- Overlooking critical evidence or conducting shoddy investigations
- Failing to advise a client of their rights
It’s imperative to understand the definition of legal malpractice . You want to have a basic understanding of your case should you consider pursuing litigation, but you also want to have an understanding of what is expected of you as a client. The relationships being formed between you and your attorney, between you and the court, and ultimately between you and the case are all as critical to the outcome of your case as the content of the documents being filed.
What is the Statute of Limitations?
Every action in New York, with some very limited exceptions, is subject to a statute of limitations; in laymen’s terms, a time limit on the bringing of an action. The legislature imposes a toll on every one’s right to bring suit except in those limited situations. Therefore, the statute of limitations period begins to run at the moment a cause of action, whether in tort or contract, arises. An action for breach of contract must be commenced within six years, while negligent actions have a three year statute of limitations. Legal Malpractice is a hybrid of these two; since it is based upon a breach of the attorney-client relationship, it is both a tort and a breach of contract. As a result, the C.P.L.R. has established a three and six year statute of limitations for an action for legal malpractice.
However, the Appellate Division has held that the shorter six year statute of limitations is applicable whenever the legal malpractice claim is based on the negligence of an attorney in the context of the exercise of reasonable professional judgment. In contrast, the three year statute of limitations is on breach of contract claims against an attorney for failure to comply with a contractual provision, such as a statute of limitations.
The logic behind the above policy is relatively straightforward: where an attorney commits an act of negligence which causes the client to suffer damages, he should be liable for any resulting harm, and the client should be able to bring suit against him to recover those damages. The typical statute of limitations in tort actions (three years) is designed to provide a client with enough time to discover that he was harmed by his attorney’s negligence, yet shorten the time within which an action could be commenced so as to prevent stale claims from being brought.
In the legal malpractice context, however, the above logic does not hold true. In addition to the general tort and contract statutes of limitations, an action for legal malpractice, unlike other negligence actions, has its own statute of limitations. This is because the liability being imposed upon an attorney for legal malpractice is predicated not only upon common law negligence principles, but also upon the existence of the contract for legal services; the retainer agreement with the attorney. When an attorney is negligently representing a client, he is disregarding the specific terms of that agreement, and is breaching it thereby. Where this has occurred, then, the so-called tort action for legal malpractice is premised upon the failure of the attorney to abide by the contractual terms and duties.
The client has three years to bring this action for legal malpractice, and the courts are adamant that he commence the action within those three years or his claim will be forever barred.
New York’s Limitations for Legal Malpractice
New York State Statutes have brought more clarity to the confusing and often contradictory case law on this subject. New York’s statute of limitations for causes of action based on negligence or breach of contract is three years from the time of the act or omission. C.P.L.R. Section 214. For cases of fraudulent concealment, the statute will not begin to run until the "offending act or omission" is discovered by the injured party, for a maximum of six years from the date of that act or omission C.P.L.R. Section 203 (g), 214(6). However, as the courts have held, a plaintiff’s claim will be time-barred even though the plaintiff is unaware of the cause of action so long as the plaintiff possesses enough knowledge of the facts to prompt a diligent inquiry. O’Donnell v. Osler, No. 9294/06, 2007 WL 3072361, at *2 (N.Y. Sup. Ct. Albany County Oct. 15, 2007). Cases asserting legal malpractice generally must be brought within three years of the date the underlying action was settled or judgment entered. See C.P.L.R. Sections 214, 214-b. The statute of limitations for an action against an attorney for fraud, on the other hand, is the longer six years mentioned above. Geiger v. Binstock, 290 A.D.2d 464 (2d Dep’t 2002). However, any legal malpractice claims, even those sounding in fraud, will be time-barred if commenced more than three years after the date of the act giving rise to the claim, unless the plaintiff can prove that the attorney fraudulently concealed his or her legal malpractice. See id. Under the more liberal limitations periods of federal statutes, almost all federal courts have consistently applied the New York doctrine of fraudulent concealment as an exception to the usual federal limitations periods. Criminal tax activities are one such instance where the statute of limitations is extended. Thus, an indictment for conspiracy or theft under Federal law tolls the statute of limitations until the period of prosecution is complete. United States v. Ott, 827 F. Supp. 23 (E.D.Pa. 1993). While there may be a high burden of proof to grant the tolling of these specific statutes of limitations., the tolls may be granted under certain circumstances. Not only must the plaintiff show that the attorney engaged in fraud, collusion, conspiracy, or other wrongful act designed to prevent the injured party from acquiring knowledge, but the plaintiff must also establish that he or she exercised attentiveness and ability to learn the truth.
How the Statute of Limitations is Measured
New York’s 3 year statute of limitations starts to run when a legal malpractice claim accrues. The first step in framing your case is finding out when it "accrued" and when the lawsuit was initiated. Remember that an extension may be possible if the attorney induced you not to sue or was in some manner in collusion with your adversary to delay the suit.
The most instructive case is the Court of Appeals’ discussion of the subject in Central New York Labourer’s Health & Safety Fund v. PricewaterhouseCoopers LLP (2009 NY Slip Op 06109)
"Applying these principles, we conclude that Plaintiffs’ causes of action for legal malpractice accrued in February 2005, when Plaintiffs first obtained actual knowledge of PCAOB’s report and were therefore able to discover the alleged malpractice. To begin with, we reject Defendants’ contention that Plaintiffs could not have discovered the losses suffered on their litigation claims until 2007, when a $25 million settlement was reached between Plaintiffs and their adversary in the litigation (the Johnson Claim). It is well settled that a legal malpractice cause of action accrues when the client knows, or should know, of the former counsel’s wrongdoing (see e.g. Shumsky v Eisenbach, 96 NY2d 164, 166 [2001]; Weisblum v Clarian, 241 AD2d 338, 339 [1st Dept 1997]). Although Plaintiffs eventually suffered a monetary loss from the malpractice after the settlement was finalized, they were aware, as early as February 2005, that the underlying litigation might have had a different outcome but for the alleged errors of Defendants. Plaintiffs’ discovery of the PCAOB report indicating the total amount they would pay in settlement of the Johnson Claim, as well as the October 2006 reversal of the law that was originally the basis for the defendants’ motion to dismiss, suggest that Plaintiffs were aware of the difference in outcome as early as February 2005. Indeed, Partners made clear in its memorandum submitted to the District Court in support of its motion to dismiss the Johnson Claim that the District Court would surely have denied a motion to dismiss had the earlier law remained in place. Given this, Plaintiffs were on notice of the possible impact of Defendants’ alleged errors by February 2005, when they obtained actual knowledge of the PCAOB report."
Consequences of Missing the Deadline
If the statute of limitations deadline is missed entirely, the potential client may be left with no legal recourse. The case is "brought" when the legal action is started, by serving a summons and complaint. CPLR 304(a) provides that a legal action ordinarily "shall be commenced upon the filing of the summons and complaint". This means that a summons and complaint must be served upon all named defendants within 60 days of the filing, so that jurisdiction is obtained over them. (No action based upon wrongful death or alienation of affections shall be brought after the expiration of two years from the accrual thereof. 8.) New York Civil Practice Law & Rules Section 201. In the absence of service of process -called "service of process", or "service"-the statute of limitations runs until the expiration of the limitations period that has interposed him or her . (McKinney’s CPLR 1021, 204 [b].) And in the absence of service of process, with no legal action "brought", the plaintiff’s right to commence his or her action is extinguished upon the expiration of the applicable statute of limitations. Assuming that the statute of limitations has not run by the time the summons and complaint is filed, the running of the statute of limitations is tolled while the action is pending up to the date the summons and complaint is served upon all named defendants. (A cause of action for negligence or malpractice notwithstanding, it is also possible, for example, for a period of limitation to be tolled by agreement, that is, a written stipulation extending the time within which to sue. Landa v. Exeter Co. Greenpoint [1975] 1).
Exceptions to the Rule
As with any legal principle, there are exceptions or extensions to the usual statute of limitations for legal malpractice cases in New York. One major extension is the discovery rule. The discovery rule tolls the statute of limitations until the date you discovered or should have discovered the malpractice or wrongdoing. As a result, the date of your lawyer’s alleged wrongdoing will not necessarily be the starting point for measuring the limitations period. If, for example, your lawyer missed a filing deadline but you did not realize that your lawyer missed it, your time to sue will likely not begin to run until a reasonable person would have discovered the error.
Another important tolling provision extends the limitations period for cases involving continuous representation. If you and your lawyer have an ongoing relationship and you continue with your legal matter, the statute of limitations for any legal malpractice claims that arise out of that case may be tolled while you are still represented by your former counsel. That means the clock for the statute of limitations will not begin to run until the continuing representation has ended. Importantly, the issue of the continuing representation tolling provision is fact-specific and context-dependent. Some courts focus solely on the legal issues in question and analyze whether the case as a whole is a continuation of the previous matter whereas others look at whether that specific issue was fully resolved. Determining whether or not the tolling provision applies will depend heavily on the facts of each case.
Regardless of the time period that ends up applying to your legal malpractice case, each legal malpractice lawsuit in New York will be time-barred if it is not filed within the relevant statute of limitations. In general, this means that you have three years to file a legal malpractice lawsuit in New York. If you miss that window, no court in New York will have jurisdiction over malpractice claims arising out of that representation.
What to Do if You Think You are A Victim of Legal Malpractice
In a case of legal malpractice the time limits set out by the statute of limitations are critical. Many only think about these only when the other side has raised it, and that may be too late. For that reason it is best not to waste too much time once you think something has gone wrong, as you may be able to resolve the problem with the offending attorney. However, if that is unsuccessful, then action must be taken quickly. The statute of limitations for malpractice is 3 years from the date of the malpractice. Thus first the client must identify when the malpractice occurred. That means that you must recount all the communications and meetings you had with the lawyer during the representation, and see if any one event stands out. Then knowledge of the malpractice is an additional hurdle set by some courts. The statute requires that the client knew of the malpractice or should have known of the malpractice within the relevant time frame. Therefore, if you were misled by representations of the attorney that he was on top of your case, or that the problem would be fixed, you might say that you should not have known that he committed malpractice until much later than the 3 year statute. Courts are divided on how to apply this knowledge requirement, and the short answer is to be cautious and quick to act.
How and When to Seek Legal Assistance
While it is never pleasant to contemplate a lawsuit against your attorney, especially after what may have already been a difficult case, realizing that you might have a viable legal malpractice claim is equally uncomfortable. As soon as you have a good faith reason to believe that your counsel may have mishandled your case in some way , you should seek legal advice. There are strict statutes of limitation that will extinguish your right to bring a claim against your counsel if you do not raise a claim in time. The statute of limitations in New York is three years from the time of the mistake that is the subject of the claim. Every case is different, and there are some factors that make this such a specialized area of practice, that it is imperative that an attorney familiar with legal malpractice cases analyze your case so that you can be guided properly moving forward.