Third Party Beneficiaries Claiming Legal Malpractice
Throughout the past century, we have seen the tort claim become among the most popular in American jurisprudence. Springing from tort claims is a daughter category called professional malpractice. Common law and statutes alike have created actions in the professional malpractice arena. Professional malpractice is the idea and theory that a professional, one who has obtained a qualified expertise in a field, can be liable to a patient or client when damages occur. The damages were the proximate cause of a professional’s error or bad judgment. Arising out of professional malpractice is the area of legal malpractice, that is all the errors that are made in the course of lawyering a client.
The word and etymology of ‘malpractice’ actually demonstrates the fundamental basis and reasoning for the cause of action. Malpractice is from the Latin ‘mala’ meaning bad, evil and wrongful, and ‘practice’ meaning the rendition of services requiring the knowledge and the application of legal principals and technique to serve the interests of another with his consent. Hence, placing the definitions together we can see that the essence of malpractice is the wrongful or bad use of the knowledge and application of legal principals with a client’s consent. Which is a sophisticated way of saying that a lawyer has “fouled up.” While this may seem obvious to any lawyer, Latin scholar, or adolescent, it is this basis for the claim of legal malpractice and more importantly its application in the plethora of scenarios that come before the Connecticut courts.
It is not disputed that lawyers-and most professionals for that matter-are held to a higher standard of care than other professions. In fact, in order to perform our jobs, we as lawyers are required to have a competent knowledge and ability to perform legal tasks. The higher standard of care places a lawyer with a duty to perform on a reasonable level at which all other lawyers are expected to perform. Furthermore, when a lawyer performs below this expected standard, he must be performing or ‘practicing’ badly or wrongfully. Hence, when a lawyer drops below the reasonable standard he has breached his duty of reasonable practice and is now in a state of malpractice.
These concepts are relatively straightforward, legal malpractice has been with us for decades. But common law and statutory law are extending malpractice beyond its original scope. Refer back to the word “malpractice.” “Mal” meaning bad or wrongful and “practice.” I have highlighted three words in the definition of “practice,” with his consent. Previously, a person seeking legal assistance would be considered part of a lawyer’s “practice” only when he or she has consented to the aforesaid lawyer’s assistance. When a consenting client feels that his or her lawyer is not performing reasonably, he or she has the ability to file a malpractice suit. No one disputes this. The problem arises when a person is damaged and has NOT consented to be in a lawyer’s practice. This person is the third party beneficiary.
What happens when a third party beneficiary is damaged? Lets take an example where we have lawyer A, Client B, and third party beneficiary C. Lawyer A has done some work for client B, but in the process person C was damaged. How can this possibly be malpractice? By definition, person C has not consented to be in the practice of Lawyer A. Lawyer A could not be liable for malpractice to person C when Lawyer A has not agreed to perform in any way for person C. Since person C has not consented, he or she cannot be in lawyer A’s practice. Hence, there is no ‘practice’ and there cannot be ‘mal’practice.
This theory held strong footing until the 1980’s when a popular exception was carved out. This exception allowed the third party beneficiary of a will to recover damages against the lawyer who negligently created and maintained the will. Courts in many jurisdictions, including Connecticut, have held that the intended beneficiary has a cause of action against an attorney who failed to draft a will in conformity with a testator’s wishes; failed to supervise the proper execution of a will; failed to advise a client of the consequences of not revising a will; or not using the most beneficial estate planning instruments.
Intended beneficiary are key words in this saga of legal malpractice. There is a trend, most recently established in Illinois case law, that expands the previous exception of third party beneficiaries to third parties other than beneficiaries of wills and trusts. In Illinois, congruent with Connecticut, the general rule holds that attorneys are not liable to persons other than their clients. This refers back to the idea that only a ‘client’ is in a lawyers ‘practice.’ Illinois has also sculpted the wills and trusts exception. In the late 1990’s, however, the Illinois cases of Pelham and Gale expanded the attorney’s liability to third parties. The Illinois Appellate courts key consideration for determining if the attorney owes a duty to the third party is whether the attorney ‘acted at the direction of or on behalf of the client to benefit or influence the third party.’ In other words, the nonclient or third party must prove that the primary intent and purpose of the attorney-client relationship was to benefit or influence that third party.
The leading Connecticut case describing third party legal malpractice is Krawczyk v. Stingle. Here, the Connecticut Supreme court has agreed that attorneys may be liable to a plaintiff if that plaintiff can demonstrate that he or she was in fact the intended or foreseeable beneficiary. In chronological order, though, we have Krawcyzk providing the foundation for legal liability to third parties and then Pelham describing the ‘primary intent and purpose’ test. Hence, we have solid case law for understanding and providing a genuine cause of action for legal malpractice to third parties. Notice that we have now drifted outside the realm of wills and trusts and into a more nebulous area. Brainstorming for a minute, this area of legal liability now extends to affected third parties in the representation of fiduciaries, business and real estate transactions, as well as intentional torts. In fact, cases have already been decided upon a third party liability standard in Kansas, New York, and Illinois, respectively.
Are you, as a lawyer, worried yet? I shall tell you it could be worse. Connecticut lawyers are provided with a formidable defense. Cleverly, perhaps, the Connecticut Supreme Court has used public policy as an estoppel against causes of action such as these. In essence, the argument is this; Courts, including the Connecticut Supreme Court, will not impose liability when such liability had the potential of interfering with the ethical obligations owed by an attorney to his or her client. Krawczyk states, “A central dimension of the attorney-client relationship is the attorney’s duty of ‘entire devotion to the interests of the client.’ The Court is concerned primarily with two things: 1. The imposition of liability would create an incentive for an attorney to exert pressure on a client to perform certain tasks, and 2. The imposition of liability would contravene the attorney’s primary responsibility to effectuate the clients’ wishes and insure that the client understands the available options and the legal and practical implications of whatever course is ultimately chosen.
I suggest that this verbose language is nothing more than a façade to protect lawyers for their mistakes. It proposes that the attorney client relationship will be strained and constrained if legal malpractice is upheld in these types of cases. It also proposes that the attorney-client relationship is currently without hindrance or as the Court says it is the lawyers ‘entire devotion to the interests of the client.’ I assert that these attorney-client relationships are bound and regulated in so many ways that every law school has a course on ethics, and every state’s bar has promulgated a code of ethics. Rules regarding the extent to which you can and cannot represent a client are always affecting and impacting the attorney-client relationship. This fanciful idea that attorneys and clients have an unfettered relationship is mythical at best. For example, an attorney cannot file frivolous lawsuits just because his client wants him to, or commit crimes with the defense, “My client told me to do it!” Clearly there are limits on the extent to which an attorney can represent a client. In essence, it appears that the proper public policy of the legal profession is and should be to deter lawyers from doing acts that will injure either their clients OR third parties. Imposing liability would actually strengthen public policy rather than hinder it, as the Connecticut Supreme Court suggests. Remember, practicing law is a privilege, not a right.
Legal malpractice in Connecticut has expanded, albeit slowly, to third parties. The ‘practice’ of a Connecticut lawyer in the new millennium has now extended beyond the definition found in Blacks law dictionary. Practice seems to include a lawyers’ clients and those in which the lawyer and client attempt to benefit or influence. As always it’s important to realize all the possible ‘players’ during the representation of clients, so that some day down the road they cannot come back to haunt you. Third parties are becoming those ‘players.’
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Stanger Stanfield Law