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Liability to Non-Clients, Part 3: Foreseeable Harm

California courts have held a lawyer liable to non-clients when the foreseeability of harm to those non-clients (resulting from the lawyer’s malpractice or professional negligence) outweighs the various policy considerations which normally make lawyers liable only to their clients.

The question, of course, is what does it mean for harm to be “foreseeable” and when does the foreseeability of harm to non-clients have enough weight to make the lawyer’s malpractice liability apply to non-clients as well as people with whom the lawyer has an attorney-client relationship?

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Let’s examine a few examples of times when the foreseeability of harm weighs in favor of holding the lawyer liable to non-clients:

1. MISREPRESENTATIONS TO THIRD PARTIES. 

When a lawyer makes material misrepresentations (of law or fact) to third party non-clients, and when those misrepresentations rise to the level of malpractice, the lawyer may be held liable for the legal consequences of his or her actions.

However, lawyers are not liable to non-clients who rely on the lawyer’s representations or advice unless the plaintiff can show the the lawyer made the statements intending to induce or cause the reliance and that the reliance was reasonable under the circumstances. In other words, not every incorrect statement a lawyer makes is legally actionable.

2. NEGLIGENT MISREPRESENTATIONS IN OPINION LETTERS, NEGOTIATIONS, AND COMMUNICATIONS.

If a lawyer makes negligent (or intentionally harmful) misrepresentations in opinion letters, negotiations, or other communications with third party non-clients, knowing that the misrepresentations were being made to people who the lawyer expected would reasonably rely upon them, the lawyer may have malpractice liability to the non-clients.

Opinion letters, in particular, are intended to secure a legal benefit not only to the attorney’s client but also to third parties who read and rely upon the formal legal opinions contained in the letter. It is foreseeable that third parties will rely on the letter, and be damaged by the professional negligence of the attorney creating the letter.

In the case of negotiations, liability may arise where an attorney makes negligent (or willfully wrongful) misrepresentations to third parties without a reasonable basis for believing the statements are actually true. Again, liability attaches in this situation only where: (a) the attorney intended for the third party non-clients to rely on the attorney’s statements, (b) such reliance was reasonable, and (c) the other elements of legal malpractice are met.

3. INTERTWINED OR RELATED RIGHTS AND INTERESTS. 

When the rights and interests of a third party (a non-client) are closely related to those of the client, or intertwined with the client’s rights and interests, the non-client’s rights or interests may depend on the outcome of the client’s claim.

For example: an attorney hired to represent a collection agency owes a duty of care not only to the client (the collection agency) but to the creditors on whose behalf the collection agency works. Those creditors are not the attorney’s clients, but the attorney’s handling of the collection agency’s claims will have a legal impact on the creditors’ claims as well. (See: Donald v. Garry (1971) 19 CA3d 769, 97 CR 191)

The attorney may be able to avoid liability by sending a letter to interested third parties, informing them that the attorney is not representing their interests and advising them to seek independent counsel. However, this may not provide a shield against malpractice claims where the foreseeability and degree of potential harm weigh in favor of holding the attorney liable. (The best option, as always, is for the attorney not to commit malpractice at all.)

EVEN HERE, ALL OTHER ELEMENTS OF MALPRACTICE LIABILITY MUST BE MET

It’s not enough for a lawyer to create a foreseeable risk of harm to non-clients, even if that harm is potentially great enough, or the foreseeability strong enough, to outweigh the general rule that a lawyer can only be help liable for malpractice to actual clients. The rule discussed in this post impacts only the “duty” element of professional negligence. After overcoming that hurdle, the plaintiff non-client must still demonstrate that he or she prevails on all of the other elements of a malpractice case.

As always, if you believe your rights have been damaged, or that you suffered injuries, as a result of a lawyer’s malpractice or other illegal or unethical conduct, do not delay: seek legal advice from an experienced malpractice attorney promptly. You may lose your rights to recover if you delay. Never let this or any other article substitute for personalized review of your case and advice from an experienced attorney.

 

 

 

 

 

 

 

 

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