Originally published in the Los Angeles Daily Update, “Rest Easier”, May 19, 1999
At the end of a long day you receive a phone call from someone you know at the clerk’s office who just heard that you have been named as a defendant in a legal malpractice case. Is this your worst nightmare? Not yet, but it can be if you allow the matter to fester through discovery on its way to a late-developing settlement or unnecessary trial. Alternatively, it can be nipped in the bud through an early and effective mediation which works to the maximum benefit of all concerned.
A growing body of highly respected practitioners now feel that there is little to lose and much to gain by exploring mediation of these cases at an early stage. This is frankly true whether the claim initially appears to be meritorious or not.
While some may incorrectly interpret a request to engage in early mediation as a “sign of weakness”, it is, indeed, quite the opposite. Your ability to educate your former client’s new lawyer early on, when he or she has only heard one side of the controversy, can prove highly beneficial; it may, for instance, cause your adversary to reevaluate (to your advantage) how much energy and resources he is willing to commit to what is in all likelihood a contingent fee case. Further, he will be meeting you in a neutral forum, rather than at your adversarial deposition, at a time when his ego involvement in the outcome of the litigation has not yet peaked. He is, after all, a fellow attorney.
On a more practical level, plaintiff’s counsel has not yet put much time into the case beyond the initial drafting of his new client’s complaint. He or she is therefore presently in the best possible position to compromise or waive a portion of his fee (if willing to do so), making a low dollar settlement viable where one might not be at a later time.
Presumably, plaintiff’s counsel, who now has potential exposure for malicious prosecution along with his newly inherited client, should be eager to learn more about, and act affirmatively to resolve, any previously unrealized legal or factual flaws in his now pending complaint. If his client’s case is later found to be lacking in probable cause, he could become the preferred target for the recovery of unnecessarily expended legal fees. He is unlikely to pass up an early settlement opportunity for fear of being second guessed at a later time, since he too now represents a client who has already demonstrated the requisite knowledge and bravado to file suit against a member of the Bar.
While the traditional fear of “educating the other side” or providing “free discovery” is always worthy of consideration this is markedly less true in California legal malpractice cases. Here, plaintiff’s counsel already has an absolute right to obtain the entirety of your former client’s file immediately, including all or nearly all of your so-called work product. Unlike other jurisdictions such as New York, the file is considered to be the client’s property, not his former lawyer’s, regardless of whether or not all outstanding fees and costs have been paid. Hence, there is not a great deal that the former attorney is going to be able to keep from disclosing in any event.
Significantly, there may be new facts which the defendant can now share for the first time based upon the waiver of attorney-client privilege recently created by the filing of the former client’s complaint. The advantage of bringing this forward at an early juncture rests in the fact that Plaintiff’s new counsel may still be in the process of evaluating whether this case represents an opportunity to recover significant damages or little more than an eventual offset against disputed legal fees from the underlying case. Indeed, the strength of these disclosures may be enough to cause him to see his client in a different light. He is still in the process of “sizing up his client”, and this includes determining whether the plaintiff has been honest with him regarding the facts.
It is presumed that the prospect of an early mediation would be an attractive one for most plaintiffs. Indeed, compromise may come easier for such an individual at this stage than at any other. With the passage of time and the inevitable challenges to their credibility, plaintiff’s often become more and more entrenched in whatever real or imagined position they have taken. As their cost bills increase with the taking of discovery and the hiring of experts, so too does their resentment of prior counsel and unilateral need to achieve a higher settlement or verdict. This, coupled with a growing, though not always realistic, sense of how easy it would have been to recover a large sum in the underlying case, often leads the plaintiff to become less willing or able to compromise as the case progresses. Hence, sooner is better than later, assuming that a sufficient level of client control and rapport has been established between the plaintiff and new counsel.
As for the beleaguered defendant in our story, their process is generally quite the opposite. The attorney charged with malpractice generally enters this drama at the high point of his or her moral outrage over being sued and compounds their inflexibility significantly by telling anyone who is willing to listen, and many who are not, that the case is completely bogus and must be defended through trial at all costs.
Invariably, however, this rigid position begins to change over time. As time goes by, and thankfully it does, lawyers facing the specter of a professional malpractice trial generally do become more willing to compromise. They begin to consider the extent to which juries often simply don’t like attorney defendants and the relative ease with which an underlying case can be made to look better than it really was at the time it came through their own door. The hardship on their existing law practice of attending a several week trial becomes real for the first time
Further, the presumptively incurable “damage to their professional reputations” which before required nothing less than public exoneration, comes to now be perceived as a lone, though annoying, filing which now lays inconspicuously buried beneath many, many others in the clerk’s office. Their earlier recollection of the facts from which there could be no possible alternative interpretation, now, in the light of day, does seem capable of being misperceived by a hostile or unsophisticated jury; at the very least, there is an acknowledgment that even if no negligence occurred, this plaintiff’s position could have some merit or else new counsel would never have taken the case. For all of these reasons, the prospect of a confidential settlement with no admission of wrong-doing gradually and invariably becomes more tolerable with the passage of time. Regrettably, this may not arise until the very best chance of a negotiated a settlement, in terms of available reserves, has already passed. This will be particularly true in the case of a relatively small policy (i.e., $100,000.) which is self-diminishing over time relative to legal fees and costs which will be paid to defense counsel as the case progresses.
Clearly, offering to mediate at an early stage can only be valued by a cost-conscious liability carrier who has been fully advised of all of the strengths and weaknesses of the case. An early, more reasonable resolution will certainly look better to their underwriters at some later time than a lengthy and expensive period of discovery, followed by extensive trial preparation, leading to an even more expensive settlement. While there are obviously many considerations to be weighed other than currying favor with one’s carrier, including one’s immutable right to pursue a matter to verdict, showing a willingness to mediate at an early stage before incurring significant legal fees demonstrates a level of reasonableness which carrier’s cannot help but appreciate. Whether or not that will subsequently translate into more favorable treatment when the issues of policy cancellation or premium increases are determined is unclear, however there are those who would contend that the bottom line for any insurance carrier is always going to be “what did it cost us”, regardless of the underlying facts.
For the attorney (rightly or wrongly) accused of malpractice, there will never be a better or more effective opportunity to express, if appropriate, some sympathy for his former client. By allowing the plaintiff to vent his or her emotions in a private forum, a well run mediation can often channel and dissipate strong feelings, rendering a State Bar complaint less likely and saving real settlement dollars for the carrier. At the very least it is a reciprocal opportunity to learn more about each other’s case and to demonstrate the kind of good faith which later settlement judges will almost certainly view in favorable terms.
While all plaintiffs are presumably favorably inclined towards settlement if the proper recovery can be achieved, the legal malpractice plaintiff is likely to desire an early termination of litigation substantially more than most. In contrast to their former counsel who is more likely to demand his day in court in what is for him a relatively familiar forum, these plaintiffs may want desperately to extricate themselves from a legal system which is still foreign to them and which they have already grown to distrust. Faced with the prospect of starting all over again with a new lawyer, legal malpractice plaintiffs may simply yearn to be free of us all much more than we, as practitioners can possibly imagine.
By handling claims of professional negligence in an expeditious manner, the put-upon practitioner can at least attempt to limit the down side of what is to follow. Much as in the case of an IRS audit, there would seem to be little upside to be had from being a defendant in a legal malpractice case. The presumed personal upset and possible embarrassment of being sued, the need to continually report such an event to all future carriers as if one were a convicted sex offender, and the countless unpaid hours spent reliving the facts of a case one would just as soon forget, are rarely justified by a legal system which most attorneys themselves know only rarely provides the total vindication which most litigants seek.
Invariably, being sued for professional negligence is likely to prove to be a highly unpleasant and unproductive experience under the best of circumstances. Early and effective mediation of such claims can reduce the many nights of restless sleep which lie ahead. In the end, it will matter little whether you’ve tossed and turned as a result of legitimate worry or righteous anger. Either way, you’ll still feel lousy in the morning.
The key, it would appear, is to try to not allow this highly charged experience and its attendant frustrations to overtake and swallow up the remainder of your personal and professional life. Hopefully, by mediating the claim when it first arises, legal malpractice defendants can at least limit the collateral consequences of this unfortunate event and avoid allowing it to become their worst nightmare.
Gene Moscovitch is a highly experienced mediator specializing in the resolution of legal malpractice, employment and commercial disputes. He is directly affiliated with ADR Services and works primarily out of their Century City Office. He can be contacted through his case manager Mara Seales at the following numbers: (310) 201-0010.
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