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Punitive Damages in Attorney Malpractice Actions

WHAT ARE PUNITIVE DAMAGES?

Punitive damages are a form of damages courts can order defendants (including defendant attorneys, in proper circumstances) to pay to prevailing plaintiffs. Punitive damages are monetary in nature, and represent amounts in excess of damages actually suffered by the plaintiff.

Although punitive damage awards are not available in all cases (in fact, they’re disfavored in many lawsuits and not permitted at all in many others), where available these damages exist to accomplish two important public policy goals: punishing a defendant for egregiously wrongful conduct and deterring similar future conduct by the defendant and others.

 

“LOST PUNITIVE DAMAGES” ARE NOT NORMALLY RECOVERABLE AGAINST A NEGLIGENT ATTORNEY

Sometimes, the plaintiff in a legal malpractice action might have been eligible to recover punitive damages in the underlying action (the one in which the plaintiff’s attorney committed malpractice), but those punitive damages were not recovered–either because the plaintiff lost the case entirely or because the attorney’s negligence resulted in a less-than-optimum recovery or ruling.

Unfortunately, these “lost punitive damages” are not normally recoverable in the subsequent legal malpractice action against the negligent lawyer.

California Courts bar this type of recovery for several public policy reasons:

1.  The amount of a “lost punitive damages award” would be highly speculative. Punitive damages awards involve the exercise of discretion by the granting court, and since the amounts are not tied to definitive evidence (as standard compensatory damages are) courts dislike awarding a prevailing plaintiff damages that are largely speculative in nature and amount.

2.  Awarding lost punitive damages to plaintiffs in malpractice actions would not punish the original wrongdoer–the defendant in the underlying action. Instead, it punishes the attorney for the actions of another. (Note: in appropriate cases, a malpractice action can result in punitive damages being assessed against the attorney as a result of the attorney’s own egregious conduct–but this differs from allowing the plaintiff to recover “lost punitive damages” that might have been recovered against an unrelated defendant.)

3. Awarding lost punitive damages would require complex evidentiary proofs (to show that the punitive damages would have been awarded by the court in the underlying action, and also to estimate the amount of the lost damages).

4. This type of award would have a negative impact on lawyers’ ability and willingness to represent clients, due to an increase in the cost of malpractice insurance (as a result of the higher malpractice liability associated with large lost punitive damages awards) and a chilling effect on lawyers’ willingness to settle cases on their clients’ behalf. Lawyers might be hesitant to offer a settlement (or to advise a client to accept one) if the client could later claim the settlement was negligently obtained and deprived the client of a prospective award of punitive damages.

 

 

PUNITIVE DAMAGES MAY BE ASSESSED AGAINST ATTORNEYS, DIRECTLY, IN LEGAL MALPRACTICE ACTIONS

Where the negligent attorney’s conduct not only constituted malpractice but displayed oppression, fraud, malice or other qualifying egregious conduct on the part of the lawyer, the attorney may be directly liable to the plaintiff client for punitive damages (in addition to other damages) in the legal malpractice action.

This differs from the plaintiff attempting to recover “lost” punitive damages from the underlying action. Instead, this form of punitive damages is based on the attorney’s own conduct. These damages are still disfavored, however, and not available unless the negligent lawyers acts were sufficiently egregious to qualify for a punitive damages award.

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Disclaimer: THIS ARTICLE IS FOR INFORMATIONAL PURPOSES ONLY, AND DOES NOT CONSTITUTE LEGAL ADVICE OR CREATE AN ATTORNEY-CLIENT RELATIONSHIP BETWEEN THE AUTHOR AND ANY PERSON. Your rights and experiences may vary. Never use an online article (including this one) to evaluate your legal claims. Speak with an experienced lawyer promptly to obtain a personalized evaluation of your claims, possible damages, and options. You may lose or compromise your rights if you delay in consulting legal counsel. Legal claims against lawyers or other third parties are a complicated topic. If you believe you have a claim against an attorney who failed to provide you with competent representation, or any other type of legal claim, consult an experienced lawyer immediately for an evaluation of your possible rights and claims.

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