WPI 107.08 Legal Malpractice—Negligence—Damages

This instruction addresses damages for negligence-based malpractice cases. For cases involving a breach of a fiduciary duty instead of negligence, use WPI 107.11 (Breach of Fiduciary Duty—Damages) instead of this instruction.

Complete this instruction by inserting appropriate elements of damages; the phrases inserted should reflect the elements of damages relevant to the legal malpractice action. If there is a directed verdict or admitted liability, delete the first three bracketed phrases. If cross-claims or third-party claims are asserted, modify the text and/or use WPI 41.05 (Counterclaim—Cross-Claim—Third-Party Claim).

The paragraph numbered (1) is drafted for cases in which malpractice is alleged to have been committed by a plaintiff's attorney in a lawsuit. If the circumstances are otherwise, this paragraph will need to be modified to fit the particulars of the case. For example, if malpractice is alleged in the drafting of a contract, paragraph (1) might read: “the difference between the value of the contract as written and the value of the contract if (name of defendant) had not been negligent in preparing it.”

For a discussion of noneconomic damages, see the Comment below.

See WPI Chapter 45 (Forms of Verdicts) for appropriate verdict forms.

This instruction is derived primarily from WPI 30.01.01 (Measure of Economic and Noneconomic Damages—Personal Injury—No Contributory Negligence). Care should be taken to identify the particular injury and appropriate potential damages linked to that injury as warranted by the evidence presented in the case. In a legal malpractice case, specific injury and the exact damages that flow from that injury may be especially challenging to isolate and determine with precision, and the trial court must be diligent in giving guidance to the jury. See generally Mallen, 3 Legal Malpractice § 21:1 (2017 ed.)

Direct or consequential damages. Direct damages may be sought, including for the value of a lost settlement opportunity or the cost of a disadvantageous settlement. See Mallen, 3 Legal Malpractice § 21:16 (2017 ed.). In appropriate circumstances, a plaintiff may also seek consequential damages, such as economic damages and mitigation damages. Mallen, 3 Legal Malpractice § 21:17–21:14 (2017 ed.).

Attorney fees as damages. The plaintiff is entitled to a full recovery of damages, without offsetting the attorney fees that the plaintiff would have paid the defendant attorney in the underlying action. Damages are calculated “without deducting a negligent attorney's hypothetical contingency fee,” because the plaintiff was required to “expend fees on a second lawyer in order to finish the job the first lawyer neglected to do.” Shoemake v. Ferrer, 168 Wn.2d 193, 201, 225 P.3d 990 (2010).

In Shoemake, the Court of Appeals discussed whether attorney fees incurred in the malpractice action (as opposed to attorney fees incurred in the underlying case that triggered the malpractice action) are recoverable in a damage award: “[a]ttorney fees are properly considered as mitigation damages only where a defendant's conduct results in the plaintiff being involved in litigation with a third party—not simply when an attorney's negligence draws a lawsuit from the plaintiff.” Shoemake v. Ferrer, 143 Wn.App. 819, 830–31, 182 P.3d 992 (2008) (emphasis in original), affirmed on other grounds at 168 Wn.2d 193, 201, 225 P.3d 990 (2010) (the Supreme Court did not accept review of this part of the Court of Appeals' opinion).

If attorney fees are part of a damage award, the damage award that includes those fees is decided by the jury; on the other hand, if the attorney fees are awarded as costs then the trial court decides whether to award fees and if so, in what amount. Hough v. Stockbridge, 152 Wn.App. 328, 348–50, 216 P.3d 1077 (2009); Jacob's Meadow Owners Ass'n v. Plateau 44 II, LLC, 139 Wn.App. 743, 757–62, 162 P.3d 1153 (2007).

“The ABC rule is an equitable rule under which attorney fees are compensable as consequential damages in certain situations.” LK Operating, LLC v. Collection Group, LLC, 181 Wn.2d 117, 123, 330 P.3d 190, 193 (2014). The three elements of the rule are (1) a wrongful act or omission by A toward B, (2) which exposes or involves B in litigation with C, and (3) C was not connected with the initial wrongful act or omission. All three elements must be established for consequential damages to be available. See LK Operating, LLC v. Collection Group, LLC, 181 Wn.2d 117, 330 P.3d 190 (2014) (dismissal of claim affirmed when all three elements were not established).

Because the ABC rule is equitable in character, an award of fees under this rule, and equitable defenses such as unclean hands, are decisions for the trial judge, not the jury.

Attorney fees as costs; disgorgement of fees for breach of fiduciary duty. As a general rule, each party in a lawsuit bears its own expenses. In certain cases, recovery of attorney fees is authorized by statute, contract, or an equitable exception to the general rule. In re Impoundment of Chevrolet Truck, 148 Wn.2d 145, 160, 60 P.3d 53 (2002). On the other hand, if the plaintiff in a malpractice suit has already paid fees to the defendant, and is now seeking reimbursement of those fees, the amount of the fees already paid may constitute a proper element of damages. Professional misconduct may be grounds to deny an attorney's claim for fees; fraud or gross misconduct by the attorney may give the client a complete defense. Ross v. Scannell, 97 Wn.2d 598, 610, 647 P.2d 1004 (1982).

The trial court has inherent power to order disgorgement of fees paid by the client if the trial court determines that an attorney has committed fraud or gross misconduct, see Kelly v. Foster, 62 Wn.App. 150, 155, 813 P.2d 598 (1991), or has breached a fiduciary duty to the client. Eriks v. Denver, 118 Wn.2d 451, 462–63, 824 P.2d 1207 (1992); Shoemake v. Ferrer, 168 Wn.2d 193, 202, 225 P.3d 990 (2010). Disgorgement of fees is a discretionary decision for the trial judge, not the jury.

In Arden v. Forsberg & Umlauf, P.S., 189 Wn.2d 315, 402 P.3d 245 (2017), the Washington Supreme Court rejected the plaintiffs' claim for disgorgement of attorney fees paid on their behalf by their insurance company, holding that “[s]ince the [plaintiffs] paid no fees, there is nothing to disgorge.” Arden v. Forsberg & Umlauf, P.S., 189 Wn.2d at 330, 402 P.3d at 252.

Criminal cases. When attorney negligence is alleged to have been committed in a criminal case, then the malpractice plaintiff (i.e., the criminal defendant) must prove actual innocence of the crime, by a preponderance of the evidence, in order to establish the damage element of legal malpractice. Ang v. Martin, 154 Wn.2d 477, 482–86, 114 P.3d 637 (2005). If the malpractice affected only the criminal sentence, rather than the conviction, there may be an exception to the actual innocence rule. See generally Powell v. Assoc. Counsel for Accused, 125 Wn.App. 773, 106 P.3d 271 (2005), appeal after remand, 146 Wn.App. 242, 191 P.3d 896 (2006) (plaintiff failed to establish that criminal defense attorney breached the standard of care, and plaintiff failed to establish damages, for alleged mistake in the context of preparing for sentencing). See also Piris v. Kitching, 185 Wn.2d 856, 375 P.3d 627 (2016).

Purpose of damages. The aim of a legal malpractice damage award is to restore plaintiff to the position he or she would have been in if the attorney (or non-attorney practicing law without a license) had met the standard of care. Shoemake v. Ferrer, 168 Wn.2d 193, 198–203, 225 P.3d 990 (2010). The measure of damages is the amount of loss actually sustained, including attorney fees under some circumstances. Shoemake v. Ferrer, 168 Wn.2d at 198–203; Jacob's Meadow Owners Ass'n v. Plateau 44 II, LLC, 139 Wn.App. 743, 758–62, 162 P.3d 1153 (2007); Flint v. Hart, 82 Wn.App. 209, 223–24, 917 P.2d 590 (1996); See also DeWolf & Allen, 16 Washington Practice, Tort Law & Practice § 16.37 (4th ed.); Mallen, 3 Legal Malpractice, Chapter 21 (2017 ed.).

In Schmidt v. Coogan, 181 Wn.2d 661, 680, 335 P.3d 424, 435 (2014), the court held “that the uncollectibility of an underlying judgment is an affirmative defense to legal malpractice that the defendant-attorneys must plead and prove.”

Noneconomic damages. In Schmidt v. Coogan, 181 Wn.2d 661, 674, 335 P.3d 424,432 (2014), a plurality of the court held “that emotional distress damages are available for attorney negligence when emotional distress is foreseeable due to the particularly egregious (or intentional) conduct of an attorney or the sensitive or personal nature of the representation.” See also Arden v. Forsberg & Umlauf, P.S., 189 Wn.2d 315, 402 P.3d 245 (2017).