The most common purpose for suing someone, whether you are suing an attorney or someone else, is to be compensated for any and all financial losses you suffered. These kinds of damages are referred to as compensatory. To `give a simple example, let us say your attorney incorrectly advised you regarding the terms and conditions of a business contract and as a result the contract ended up costing you $100,000 more than it would have cost but for the improper advice of your attorney. The basic compensatory damage in that situation would be $100,000.
Another kind of damage that may be available in some states is called punitive damages (or exemplary damages). Punitive damages, where available, are designed to punish wrongdoers, or deter such activity in the future. If imposed, they are an extra payment above and beyond the actual monetary losses. It is the equivalent of a fine.
Most but not all states allow punitive damages, and most states have strict limitations as to when it can be awarded and what it includes. While this area a law is changing all the time, a summary of punitive damage laws from 2011 will give you an idea of its complexity.
One study found that out of the 25,000 civil trials that took place in 2005 throughout the United States, only about 700 resulted in an award of punitive damages. The average award for punitive damages that year was $64,000, but that included cases where there were punitive damages in the millions of dollars. There is no indication in this study of how many legal malpractice cases resulted in punitive damages, but my guess is that it is likely very few.
The reason for this is that legal malpractice cases generally allege an attorney has been negligent in how representation was handled, rather than intentionally doing something wrong to damage you. While the specifics differ in each state, punitive damages usually require “a high degree of moral turpitude“, and “such wanton dishonesty as to imply a criminal indifference to civil obligations.” Although you may not have used the word turpitude recently, it is one of those legal terms that means really really bad, close to immoral conduct.
Since the idea behind punitive damages is to punish past wrongdoing, or dissuade future wrongdoing, punitive damages almost always apply to outrageous intentional or reckless actions, not negligent actions. However, one state supreme court recently held that punitive damages could be sought if the attorney was grossly negligent.
Though punitive damages may not be available for legal malpractice claims in your state, in some jurisdictions punitive damages may be available for breach of fiduciary claims. What is the difference between legal malpractice and breach of fiduciary duty? A breach of fiduciary duty by an attorney will generally involve intentional, reckless, or dishonest behavior. Breaches of fiduciary duty may include such things as conflicts of interest, mishandling of client funds, and disclosure of attorney-client information.
The take away from this is that if you do have a legal malpractice case, you should ask your attorney about punitive damages to see if there are any exceptions or circumstances that would make this a possibility in your jurisdiction. In addition, if your attorney advises you that you may have a breach of fiduciary duty claim, you may want to find out whether there is any possibility these breaches of fiduciary duty would permit a claim for punitive damages.
In a future blog I will address in more detail a related but different circumstance: What happens if your attorney (the one you want to sue for legal malpractice) originally represented you in a case where you were seeking punitive damages from someone else (such as in a personal injury case, a libel action, medical malpractice, etc.), but as a result of the legal malpractice of your attorney, punitive damages were not awarded?
Can you collect the punitive damages that you believe that you would have been awarded in the original case but for the legal malpractice of your attorney?
In other words, you are not seeking punitive damages against the attorney simply because he or she committed legal malpractice or breached a fiduciary duty, but you are claiming that the original case involved punitive damages, and that you lost the punitive damages because of the legal malpractice.
While most states have not addressed this issue, there is a split in states that have, with some permitting the recovery of lost punitive damages, and others not permitting that.
Author: Howard Altschuler
(Click here for a brief summary of my other blog posts on various legal malpractice related issues)
(Disclaimer: Please note that nothing in this blog or website is legal advice, and this post does not create an attorney-client relationship. You should always consult with an attorney for any legal malpractice issues, fee dispute, or ethical concerns that you may have. Thanks!)
Copyright (c) 2013 by Howard Altschuler, All Rights Reserved