The Risk Manager, Winter 2011
It is bad enough to have to notify a client that you have been negligent in handling his matter, but it compounds the error when that notification includes incorrect information – malpractice upon malpractice. A Georgia lawyer learned this the hard way when he was sued for malpractice and defended by asserting that the statute of limitations barred the malpractice suit. The plaintiff argued that lawyer’s written erroneous representation to her of when the limitation period began to run constituted fraud that tolled the running of the limitation period. (Sowerby v. Doyal, Ga. Ct. App., No. A10A1584, 10/22/10).
The Sowerby case prompts us to offer the following update of previous Lawyers Mutual newsletters and articles* on the risk management considerations when notifying a client of malpractice:
- Under Kentucky Rule of Professional Conduct 1.4, Communication, a lawyer is required to “keep a client reasonably informed about the status of a matter and promptly comply with reasonable requests for information. Patently, a question of malpractice is a matter that must be promptly brought to a client’s attention. This may be done by telephone or letter, but the recommended procedure is a personal meeting with the client followed with a letter. Two complete files should be made – one for the firm and one for the client at the appropriate time. It may be prudent to have another lawyer from the firm present with the errant lawyer when the client is advised of the problem. It is imperative that no representation be made to the client that the firm’s malpractice insurance will cover the claim. While candor is required when first notifying a client of an apparent error, admissions against interest concerning details of the error or value of the claim should not be made. It is best not to apologize when informing a client about a malpractice issue beyond saying “I’m sorry this happened.” An apology that overtly or indirectly concedes error will be introduced at trial if the situation goes that far. There usually should be no attempt at this juncture to settle the claim.
- Providing a specific statute of limitation time for a malpractice claim should be avoided. Even though the Kentucky statute of limitations for legal malpractice appears straightforward, its application involves several variables that make an evaluation of when the statute begins to run or is tolled problematic. This calculation is best left for a successor lawyer to determine. Simply inform a client that K.R.S. 413.245 provides the statute of limitations for legal malpractice suits and that legal advice should be sought promptly to determine its application. It is especially important to do this if it appears the limitations period will expire in a short period of time.
- It is beyond the scope of this article to go into detail about the Kentucky legal malpractice statute of limitations. What follows are the major considerations in applying the statute. They illustrate the complexity of determining the legal malpractice statute of limitations and why it is prudent not to advise on it in a notification of malpractice. Interestingly, in Sowerby the defendant admitted that he had not even researched the issue before advising his client of when the statute began to run:
- The K.R.S. 413.245 limitation period for legal malpractice in Kentucky is “... one (1) year from the date of the occurrence or from the date when the cause of action was, or reasonably should have been, discovered by the party injured.”
- Our statute adopts the discovery rule that recognizes that the client is at a disadvantage in the attorney-client relationship and may not appreciate that malpractice has occurred. Thus, the limitations period is tolled until the client has or reasonably should have learned of the malpractice. This rule’s effect is to lengthen malpractice exposure in many cases well beyond one year.
- Damages are an indispensable element in a malpractice action against an attorney. There must be damage, irrevocable and non-speculative, before a malpractice cause of action arises and the statute of limitations begins to run (Northwestern Nat. Ins. Co. v. Osborne, 610 F. Supp. 126, 129 (D.C. Ky. 1985).
- If a lawyer continues to represent a client after malpractice has occurred, the continuous representation rule may toll the statute of limitations.
- In a litigation malpractice claim the key question is whether any appeal is final.
The Georgia lawyer got lucky. The Court found that “Doyal cannot show fraud to overcome the defense that her claim was time-barred because the undisputed evidence showed that she discovered her potential cause of action against Sowerby and the firm within the limitation period. …. Under these circumstances we find no evidence to support Doyal's argument that fraud on the part of Sowerby or the law firm deterred her from bringing her action so as to toll the limitation period.”
You may not be so lucky.
- * See Hard Economic Times Mean More Malpractice Claims , KBA Bench & Bar, January 2009, Vol. 73, No. 1; The Kentucky Malpractice Statute of Limitations - The Supreme Court Clears the Air, KBA Bench & Bar, Fall 1994, Vol.58, No.4. Both articles are available on Lawyers Mutual’s Website at lmick.com – click on Resources and go to Bench & Bar Articles.