United States: How to Avoid Unexpected Claims From Unexpected People

As published in The Daily Report

It is fairly routine for attorneys to post content—on blogs, on social media or on their firm's webpage—regarding legal issues or breaking news. Here is a possible scenario. After posting an article about the state's requirements for filing a divorce, an attorney receives an emailed question from a member of the public, asking what steps are required to preserve an existing custody arrangement. The attorney replies, noting that, while the attorney cannot advise on the person's specific situation, the factors governing custody are outlined in specific statutes and case law. Six months later, the attorney receives a demand for legal malpractice, in which that member of the public argues that she suffered an adverse decision after relying on the attorney's article and follow-up "advice."

While obviously such a claim would appear to have little merit or value, given the attorney's actions, it is possible that a court would require significant discovery or litigation before dismissing the claim. Indeed, while an attorney's liability for professional negligence is generally limited to the class of people to whom the attorney owes a legal duty to exercise ordinary care, skill and diligence, there can be situations in which an attorney faces an unexpected claim from an unexpected source. 

That is because, under the doctrine of foreseeable reliance, a court could find that a professional owes a duty to those persons whom the professional is aware will rely upon the professional in the transaction, even nonclients. Courts sometimes examine whether an attorney-client relationship was formed not only from the perspective of the professional (to determine what the professional intended), but also from the perspective of the plaintiff to determine whether that person reasonably believed they were receiving legal advice or had an attorney-client relationship with the attorney. Here are some tips for how to minimize those risks—starting with the person responding to a blog entry and including other situations.

Using Disclaimers

Nonclients may attempt to argue that any interaction with a lawyer—at a conference, via Twitter or the email interaction described above—constitutes a legal relationship. The use of disclaimers, while not required, can help rebut such an assumption.

A disclaimer can be used to defeat a claim of foreseeable reliance. Indeed, many firms use disclaimers on their websites or on blogs to confirm that their attorneys are not providing legal advice through online posts. Such language could additionally suggest that no attorney-client relationship is intended unless the "client" receives an engagement letter from the attorney.

The use of such disclaimers is neither required nor an absolute defense against a claim from a non-client. But they can help reduce the chance that a court will conclude that a third party was reasonable in believing that they shared a confidential relationship with an attorney.

Using Engagement Letters

Engagement letters also help define the attorney-client relationship, including by identifying the client, the scope of the representation and the duration of the representation. Thus, the engagement letter can be a valuable tool in rebutting a suggestion that a representation extended to a party beyond just the client. 

For example, an engagement letter could state that a lawyer is providing legal advice to a corporation regarding specific issues. It could also specify that the lawyer is not being hired to act on behalf of or provide advice to executives of that corporation. Then, if an executive later claims that they believed the lawyer was acting on their behalf, the engagement letter can help rebut that claim. While engagement letters are not required to contain such specific or limiting language, including language aimed at limiting implied or unintended attorney-client relationships can be helpful down the road.

Many law firms will not permit a new matter to be billed to until there is an engagement letter in the record. If a lawyer or firm regularly sends engagement letters for new clients or new matters, the absence of a letter can be persuasive when a party claims an attorney-client relationship with the lawyer or firm but does not have an engagement letter in hand.

Some firms will consider putting language in the engagement letter that suggests what will be considered the "end" of a representation, such as the completion of an appeal or some specific period of inactivity. In the absence of some definition or limitation on the representation, a court may assume that the representation is a general representation for all purposes, giving rise to the argument that the attorney owed additional duties to the client that the attorney did not intend.

Another important component that can be included in an engagement letter is "no assignability" language. Most states prohibit the assignability of legal malpractice claims. However, some states permit the practice in certain circumstances or are ambiguous regarding when assignment is allowed. Thus, including nonassignment language in an engagement letter can help reduce the risk of a client assigning their right of action to a nonparty.

File Closing Letters

When it comes time to terminate an attorney-client relationship, the use of a file closing letter can help provide clear guidance to both the client and the attorney. While sending a file closing letter is not required—indeed, many attorneys and firms do not include the use of a file closing letter as part of their regular practice—it can help limit the receipt of claims after an expected time frame.

Closing a file can impact the applicable statute of limitations if there is a potential breach of duty to a client. Sending a file closing letter can confirm that the attorney owes no additional duties to the client and can serve as evidence to rebut a former client's assertion that they expected an attorney to continue the representation or take on additional risks. Closing files can serve as evidence that an attorneys' duty, either to clients or others, has ended and thus is another way to limit the possibility of receiving a claim from a third party.

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.