Are legal malpractice claims assignable?
One issue that comes up time and time again in settlement discussions over a wide array of cases is whether, as part of a settlement, one party can assign another the right to bring a legal malpractice claim or lawsuit against the party’s attorney or former attorney. The issue comes up as often as it does because quite frequently parties end up in litigation because an attorney inartfully drafted a legal document or gave incorrect advice to a client.
Until 1999, it was believed that legal malpractice claims were not assignable. However, in New Hampshire Insurance Co. v. McCann, 429 Mass. 202, 707 N.E.2d 332 (1999), the Supreme Judicial Court held that certain legal malpractice claims may be “voluntarily assigned”. The court rejected the defendant’s assertion that allowing assignment would create “open trading” of such claims as if they were commodities. The court also rejected the argument that permitting assignments would discourage lawyers “from zealously representing a client out of fear that the client may later offer a malpractice action against the lawyer as a part of the resolution of another case.”
While the court in McCann had plenty of positive things to say about the assignability of legal malpractice claims, it also stated that “(w)e are not persuaded that every voluntary assignment of a legal malpractice claim should be barred as a matter of law.” This language should throw up something of a cautionary flag to those seeking to negotiate assignments of such claims. It is fair to say that assignments that are negotiated by parties who are represented by attorneys (other than the attorney who is the potential defendant in the malpractice claim) are likely to survive a legal challenge.
One area that is fertile ground for assignments of legal malpractice claims is in the estate and probate litigation arena. In most instances, persons who are aggrieved by estate dispositions and instances of disinheritance (e.g. amended wills) cannot sue the attorney who prepared the will, trust or other estate planning document. However, in my practice we are now negotiating assignments of these claims with the executors or administrators of estates.
An illustrative example is as follows: A woman has three children and visits a lawyer to prepare an estate plan. The woman makes out a will leaving all of her real and personal property to one of her children, who happens to be the child who engaged the lawyer, took mom to the lawyer’s office, and even paid the lawyer’s bill. When mom dies, the other two children are shocked to learn that they were left with nothing. Of course, the two “disinherited” children might decide to challenge the validity of the will through a will contest in the Probate Court. They also have the possibility of being able to negotiate an assignment by the estate of a legal malpractice claim the estate may have against the attorney who drafted mom’s will. You can thank the McCann case for that!