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Can an attorney commit malpractice during a settlement?

These days, most civil claims are settled out of court. Very few go to trial. This means you’ll most likely want an attorney who will represent you well during settlement negotiations. But what can you do if those negotiations go wrong?

The reality is that your options may be limited. While you may still hold your attorney accountable for clear malpractice, the standards for attorney conduct tend to focus more on trial duties. As a recent article from the University of Chicago Law Review noted, the result is that settlements very rarely lead to legal malpractice claims or even bar complaints. And when they do? The plaintiffs are rarely successful.

When is it possible to prove malpractice during a settlement?

The article cited three reasons attorneys most often get the benefit of the doubt after settling:

  • The law gives attorneys tremendous freedom to select and employ their chosen strategies. Settlement negotiations tend to feature fewer solid standards and more strategic decisions than trials.
  • It’s hard to translate an attorney’s failures during a settlement to the standard case-within-a-case model courts use to determine if the attorney’s failures lead directly to the plaintiff’s damages. There are more people involved in each decision, and the court recognizes that you have the final say in what you will or won’t accept.
  • Your malpractice claim hinges upon your ability to show actual damages. These damages are typically shown by the difference between the dollar amount you won or lost at trial and the amount you would have won had your lawyer acted properly. But settlements end with both sides agreeing to an offer, and it’s hard to prove that one side might have brought or agreed to a different offer.

These standards make it difficult to win legal malpractice cases after a settlement. Even if you can show that your attorney clearly violated the California Rules of Professional Conduct.

For example, Rule 1.4.1 says that your lawyer must keep you informed of all settlement offers and their terms. This communication must also be “prompt.” But even if you can prove your attorney did not promptly communicate the terms of an offer, you may still find it difficult to prove that prompt communication would have changed the result in your favor.

On the other hand, there may be circumstances in which you can clearly identify your attorney’s failures, direct causation and real damages. Perhaps your attorney failed to communicate a settlement offer that fell within the range you had stated was acceptable. However, because you didn’t learn of the offer, you didn’t settle at that time, and the eventual settlement was much worse.

There’s likely far more settlement malpractice than we know

Given the percentage of cases that settle out of court, attorneys likely commit a great deal more malpractice in those settlements than people end up reporting. However, the three obstacles noted above make it hard for victims to win settlement malpractice claims.

But it’s important to make your decisions based on the facts, not the statistics. If you believe your attorney wronged you during a settlement, you needn’t simply give up. You can ask an attorney with experience in legal malpractice to evaluate the strength of your claim.