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Sharing Malpractice Liability Between Out-of-State and Local Counsel

Connell, Foley & Geiser, LLP v. Israel Travel Advisory Service, Inc.,377 N.J. Super. 350, 872 A.2d 1100 (App. Div. 2005)

NJ Underlying litigation

Student Contributor:  Dannis Le,  Class of 2009.

Facts: Out-of-state law firm recommended a New Jersey law firm to represent client in litigation. That firm worked closely with the N.J. law firm but did not appear as counsel of record. After client lost the case, the NJ law firm sued client for unpaid legal fees and client counter-claimed for malpractice. Client did not claim that out-of-state firm committed malpractice. The NJ law firm sought contribution  from the out-of-state firm in the malpractice action, on the theory that it was either co-counsel or successor counsel in the underlying case. 

Issue: Is out-of-state counsel liable for contribution tn a malpractice action when it did not appear as counsel of record with NJ local counsel?

Ruling: The Appellate Division remanded the malpractice claim for trial and affirmed that the NJ law firm could seek contribution from the out-of-state firm, because: 

  1. Co-counsel owes a duty to the client, not to other co-counsel. NJ local counsel must show that the out of state law firm had a duty to their joint client in order to seek contribution in the client’s malpractice claim. 
  2. Liability under the NJ Joint Tortfeasors Contribution Law. It would defeat the purpose of the JTCL to allow the out of state law firm to escape liability because it was not named in the malpractice claim: "The purpose of the JTCL is to promote the fair sharing of the burden of judgment by joint tortfeasors and to prevent a plaintiff from arbitrarily selecting his or her victim." 
  3. Malpractice can occur whether or not an attorney is formally admitted to practice in the state. The Court found no authority to the contrary. Not being admitted to a state does not bar a malpractice claim against out-of-state counsel in that state. 

Lesson: A firm acting as co-counsel has a duty to the client. Co-counsel can be held jointly liable for any malpractice committed. This is true even if they are not admitted pro hac vice in NJ and are not the counsel of record. But under NJ law there is no successor counsel liability. 

Editor’s Note: On the duty of local NJ counsel when lead counsel is an out-of-state firm acting pro hac vice, see Ingemi v. Pelino & Lentz, 866 F. Supp. 156 (D.N.J. 1994) where NJ local counsel was held to a reasonable care standard and a duty to take more than a de minimis role in representing the client.

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Posted in: Joint & Several Liability, Litigation, New Jersey