It is clear that clients can hold lawyers responsible for failing to protect their interests, but what about nonclients?
By Thomas R. Stauch, Matthew A. Nowak and Ryan C. Gentry
Lawyers have weighty responsibilities when it comes to representing clients. Their negligent actions (or inaction) can jeopardize their clients' rights, and may cause significant damage, including the loss of substantial sums of money. But what happens when a lawyer's negligence harms someone who is not technically a client?
This question often arises in the estate planning context. When the beneficiaries of a trust or estate feel they have been wronged, for example, they may seek to hold the lawyer who drafted the estate documents accountable, even though the beneficiaries were never the lawyer's clients. How does Texas law address these situations?
The privity rule
The general rule is simple: Non-clients generally cannot sue lawyers who did not represent them. This standard, called the privity rule, finds its footing in the definition of legal malpractice. To hold an attorney accountable, the plaintiff must prove three basic elements:
- A legal duty (including privity)
- A breach of that duty
- Harm that resulted from the breach
The first element - privity - establishes the legal and ethical obligations a licensed attorney owes to his or her clients. These duties arise directly from the attorney-client relationship. Without privity, there is no attorney-client relationship, and therefore no duty owed by the lawyer. A lawyer cannot be negligent if he owes no duty, such as to a non-client.
The reasoning behind this rule stems from the high standards attorneys must follow when representing clients. The law considers the attorney-client relationship a fiduciary relationship, thus lawyers owe their clients the highest duty of care, loyalty, and fidelity recognized by law. Extending these duties to non-clients, it is believed, might dilute the fiduciary relationship of lawyer and client.
Implied attorney-client relationships
What if an attorney acts as though he or she is your lawyer? What if the attorney gives you that impression and never bothers to clarify otherwise?
In this situation, you may still have a legal malpractice claim. The attorney-client relationship can be express (i.e., written out in a detailed representation agreement) or implied. When an attorney leads a non-client to believe an attorney-client relationship actually exists, then he or she can be held to the high standards that relationship entails.
In one prominent case, a non-client businessman won a $1.29 million jury verdict against the law firm that represented his company. The law firm exposed itself to liability by failing to clarify that it represented only the company - not the businessman.
A key exception to the general rule
In recent years, the Texas Supreme Court has carved out a limited exception to the privity rule in the estate context. For example, suppose that an attorney negligently drafts estate planning documents that expose the client to significant estate taxes that would have been avoided with properly drafted documents. If the negligence does not come to light until the documents take effect after the client's death, who can hold the attorney responsible? In these situations, the personal representative of the estate may bring a legal malpractice claim against the attorney. Even though the representative isn't a client in his or her individual capacity, he or she stands in the shoes of the deceased client and acts on behalf of the deceased's estate. In such circumstances, however, the malpractice claim must be limited to harm suffered by the estate itself. Claims for individualized harm to the estate's beneficiaries are not actionable, because the beneficiaries were never the lawyer's clients.
Another path to pursuing accountability
Even if you can't bring a legal malpractice claim against a lawyer who wasn't your lawyer, you may still have other options for seeking legal recourse. The privity rule doesn't apply in tort cases that are distinct from legal malpractice. For example, Texas courts have recognized that non-clients can sue lawyers for negligent misrepresentation, fraud, or DTPA violations, if those causes of action would be sustainable against a defendant generally.
If you have questions about how to hold a lawyer responsible for his or her negligence or intentional wrongdoing, speak with an attorney about your rights. The legal team at Nowak & Stauch, LLP, has extensive experience holding lawyers accountable for legal malpractice.
Keywords: lawyer malpractice, attorney malpractice, professional negligence, attorney-client relationship