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Professional Liability Law
(2020), the Louisiana Supreme Court held that proof of collectability of an underlying judgment is not an element necessary for a plaintiff to establish a claim for legal malpractice, nor can collectability be asserted by an attorney as an affirmative defense in a legal malpractice action. The Court stated: “We will not allow a malpractice defendant to assert a defense based on the wealth or poverty of the underlying tortfeasor when a defendant in any other type of tort action could not assert a similarly based defense.”
From a defense perspective, and, indeed, from any attorney’s perspective, this opens up a Pandora’s box of exposure. The case renders an attorney liable to pay for whatever his client might have been able to prove as damages in the underlying case, regardless of whether his client would have been able to actually collect the damages. Thankfully, the decision was legislatively overruled last year. See 2022 La. Sess. Law Serv. Act 285 (S.B. 103) (WEST). The statute permits a collectability defense, but the defendant-attorney bears the burden of proof on the defense.
The Takeaway
When defending a legal malpractice claim, research your jurisdiction’s position on collectability. Check to see if it is an element the Plaintiff must prove as part of his claim, or if the attorney has the burden to raise it as a defense and prove that damages should be capped at a certain amount based on Plaintiff’s ability to collect in the Underlying Case.
Legal malpractice plaintiffs shouldn’t count their money at the table. They can only count on what they could have collected in the Underlying Case.
Kenneth A. McLellan is an FDCC Defense Counsel member and a Partner with Winget, Spadafora & Schwartzberg, LLP in New York, NY. Contact him at: mclellan.k@wssllp.com
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FDCC ANNUAL FIVES 2023