Damages
The measure of damages in legal malpractice is what was proximately caused by the wrongful act or omission . 50 Negligence alone is not sufficient . The attorney ’ s acts must be the cause of the client ’ s losses . 51 An attorney drafted a deed in accord with a survey , but left out two ten-acre lots and rights of way . In that case , he was not obliged to cover the loss even though the deed wasn ’ t drafted in accord with the parties ’ intentions because the execution and acceptance of the deed was a mutual mistake . The trial court reformed the deed accordingly . As the claimed damages were not inspired by the attorney ’ s action alone , and not the proximate cause of the loss , there was no cause of action . The landowner ’ s claim for damages based on speculative claims that she could have sold the two lots was insufficient to support her demand . 52
Damages cannot be speculative . An attorney who without authority settled a judgment , then sold the notes received in the settlement at a discount , was held to owe the client the amount actually received from the sale , and not the total amount of the judgment , as the client claimed . 53
An attorney cannot recover fees for services which were of no avail on account of the attorney ’ s negligence or mistake . However , this may be the limit to damages in many instances . As the Court explained in this decision from 1857 , “ We do not intend to intimate here , by any means , that we think the defendants liable beyond the loss of their fees . The cases read at the bar would seem to indicate that in a doubtful matter of law the attorney is not liable to his client for damages arising from mere misjudgment .” 54
An attorney is also likely to have to pay interest on funds obtained from an insurance company in settlement , when unreasonably withheld , measured from the time the money should have been paid over to the client . 55 In such claims , however , an attorney has discretion in not prosecuting when “ he is influenced by a prudent regard to the interest of the creditor .” 56
The proper measure of damages for legal malpractice for certifying title without discovering that the deed was improperly written , conveying less land than expected , is the difference between what the client purchased and what he expected to purchase , including the expected benefits lost as a result of the error . 57
Parties are not entitled to attorney ’ s fees in the assessment of damages for legal malpractice . The collateral-litigation exception to the American Rule allowing the fees does not apply to the civil action by a client against an attorney . 58
Attorney ’ s fees are awarded in consumer fraud victories by statute but not in legal malpractice . Plaintiffs bear their own costs and fees . An attorney ’ s misstatement of fact to a client cannot constitute consumer fraud . 59 A plaintiff cannot simply recast a malpractice action as a consumer fraud claim , when the errors complained of are the product of an attorney ’ s professional judgment based on his legal knowledge and skill . 60
Insurance
The relatively small number of appealed legal malpractice cases in the Vermont canon is no indication of how many claims are filed . Settlements of legal malpractice cases are common , as insurers measure the relative cost of defense against the demands of the unhappy client . Details of those settlements are rarely reported , and then only generally in official records , as most resolutions come with a confidentiality clause . The total number of claims filed in Vermont and the total amount of damages paid is not known .
Avoidance
Protecting ourselves from legal malpractice claims entirely is probably impossible , but there are ways of lessening the risk . Double check every deadline , and put them on the calendar . Take more care in drafting complaints , counterclaims , answers , and affirmative defenses . In jury cases , never ignore the opportunities for directed verdicts , remembering to renew them at the end of trial to preserve the claim for appeal . Write clear retainer agreements that specify the boundaries of the representation . Write opinion letters candidly assessing the risks and options . Discuss strategy with clients and always keep them apprised of the status . Regularly review how the client spells “ victory ,” and the necessary steps to achieve that goal . Be clear when client ’ s directions are rejected . Withdraw early when major disputes arise between client and counsel . Never refuse to provide copies of records when there is a fee dispute . 61
And pray for loyal clients , who understand when loss comes that the attorney is not necessarily the reason for the defeat , who appreciate what is done , whose trust extends beyond the last judgment , and who are cognizant that “ the mere fact that appellant lost his case does not establish negligence .” 62 ____________________ Paul S . Gillies , Esq ., is a partner in the Montpelier firm of Tarrant , Gillies & Richardson and is a regular contributor to the Vermont Bar Journal . A collection of his columns has been published under the title of Uncommon Law , Ancient Roads , and
Ruminations www . vtbar . org THE VERMONT BAR JOURNAL • SUMMER 2016 13
The measure of damages in legal malpractice is what was proximately caused
by the wrongful act or omission.50 Negligence alone is not sufficient. The attorney’s
acts must be the cause of the client’s losses.51 An attorney drafted a deed in accord
with a survey, but left out two ten-acre lots
and rights of way. In that case, he was not
obliged to cover the loss even though the
deed wasn’t drafted in accord with the parties’ intentions because the execution and
acceptance of the deed was a mutual mistake. The trial court reformed the deed accordingly. As the claimed damages were
not inspired by the attorney’s action alone,
and not the proximate cause of the loss,
there was no cause of action. The landowner’s claim for damages based on speculative claims that she could have sold the
two lots was insufficient to support her demand.52
Damages cannot be speculative. An attorney who without authority settled a
judgment, then sold the notes received in
the settlement at a discount, was held to
owe the client the amount actually received
from the sale, and not the total amount of
the judgment, as the client claimed.53
An attorney cannot recover fees for services which were of no avail on account of
the attorney’s negligence or mistake. However, this may be the limit to damages in
many instances. As the Court explained
in this decision from 1857, “We do not intend to intimate here, by any means, that
we think the defendants liable beyond the
loss of their fees. The cases read at the bar
would seem to indicate that in a doubtful
matter of law the attorney is not liable to
his client for damages arising from mere
misjudgment.” 54
An attorney is also likely to have to pay
interest on funds obtained from an insurance company in settlement, when unreasonably withheld, measured from the time
the money should have been paid over to
the client.55 In such claims, however, an attorney has discretion in not prosecuting
when “he is influenced by a prudent regard
to the interest of the creditor.”56
The proper measure of damages for legal malpractice for certifying title without
discovering that the deed was improperly
written, conveying less land than expected,
is the difference between what the client
purchased and what he expected to purchase, including the expected benefits lost
as a result of the error.57
Parties are not entitled to attorney’s
fees in the assessment of damages for legal malpractice. The collateral-litigation exception to the American Rule allowing the
fees does not apply to the civil action by a
client against an attorney.58
Attorney’s fees are awarded in consumer
www.vtbar.org
fraud victories by statute but not in legal
malpractice. Plaintiffs bear their own costs
and fees. An attorney’s misstatement of
fact to a client cannot constitute consumer fraud.59 A plaintiff cannot simply recast
a malpractice action as a consumer fraud
claim, when the errors complained of are
the product of an attorney’s professional
judgment based on his legal knowledge
and skill.60
Ruminations
Damages
Insurance
The relatively small number of appealed
legal malpractice cases in the Vermont canon is no indication of how many claims are
filed. Settlements of legal malpractice cases are common, as insurers measure the relative cost of defense against the demands
of the unhappy client. Details of those settlements are rarely reported, and then only
generally in official records, as most resolutions come with a confidentiality clause.
The total number of claims filed in Vermont
and the total amount of damages paid is
not known.
Avoidance
Protecting ourselves from legal malpractice claims entirely is probably impossible,
but there are ways of lessening the risk.
Double check every deadline, and put them
on the calendar. Take more care in drafting
complaints, counterclaims, answers, and
affirmative defenses. In jury cases, never
ignore the opportunities for directed verdicts, remembering to renew them at the
end of trial to preserve the claim for appeal. Write clear retainer agreements that
specify the boundaries of the representation. Write opinion letters candidly assessing the risks and options. \\ ]YH ]Y[ [[ ^\Y\ [H\ \Yو H ] \ˈY[\ H ]Y]HY[ [ 8' XܞK8'H[ HX\\H \ XY]H ][ HX\[Y[8&\\X[ۜ\H ZXY ] ]X\ H [XZ܈\ ]\\\H] Y[Y[[[[ ]\ Y\H ݚYHY\و Xܙ [ \H\BYH\ ]KB[ ^H܈X[Y[ [\[ [Y\ ] H] ܛ^H\X\\[ H H X\ۈ܈ HYX] \ XX]H ]\ۙK H \^ [ ^[ۙ H\YY[ [\Hۚ^[ ]8' HY\HX ]\ [[\\H\\X\YY[K'M][ˈ[Y\\K\H \\[ B[ [Y\\Hو\[ [Y\ X\ ۈ[\H Y[\ X]܈ B\[\\[ HX[ۈو\ [[\Y[ X\Y [\ H ]Hو[[[ۈ][Y[Y [HTSӕTTS8(SSQT ML