Tim Parilla examines how a client’s role as a plaintiff or defendant in an underlying lawsuit has a significant effect on legal malpractice claims in an unexpected way in his Law360 article, “The Problem With Collectability In Legal Malpractice Claims.”

A client who is a plaintiff in an underlying suit needs to prove that the underlying party sued was solvent or had insurance that would have covered the judgment. If the client cannot do so, it will have no recourse against its negligent attorney. Unlike plaintiffs, defendants who pursue legal malpractice claims against their counsel do not have to prove that they were actually harmed by their counsel’s legal malpractice. Rather, courts will presume damage regardless of whether the defendants actually had the ability to pay the judgment in question.

Tim’s article discusses Newman as Trustee of the World Marketing Trust v. Crane Heyman Simon Welch & Clar, a case in which the U.S. District Court for the Northern District of Illinois recently upheld this rule despite the fact that the allegedly negligent attorney tried to show that the judgment was not collectable. The article also explores how courts address the collectability of a potential judgment in the context of legal malpractice claims.

Tim suggests that the fallout from the Coronavirus pandemic has the potential to generate an increase in legal malpractice claims and bankruptcies resulting in issues of collectability arising more frequently. He advises practitioners litigating legal malpractice claims to not only carefully consider collectability issues, but also the law of forum, the existence of any choice of law provisions, and other potentially applicable state laws as the burden of proof may vary depending on the outcome of that analysis. Read more here.

Tim serves his clients in complex commercial disputes including breach of contract, breach of fiduciary duty, product liability, and construction litigation.

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