Settlement offers in legal malpractice cases

California lawyers make mistakes, and some of these errors amount to legal malpractice. Most attorneys take accusations of malpractice seriously: These are allegations that could conceivably stunt a career if the prosecution proves them to be true. Guilty verdicts in malpractice cases also result in significant stains on an entire firm’s reputation. These dire consequences often lead to large firms employing malpractice defense lawyers. In addition, defendants tend to do whatever is in their power to settle outside of court if it seems the evidence would result in an unfavorable decision for the defense. 

However, these conditions do not mean that every settlement offer is an authentic bid to save the defendant’s professional reputation. Some of these agreements have the potential to be much more advantageous for the defense than the prosecution.

Bloomberg Law reports about a major legal malpractice case in which the results of the lawyers’ alleged mistakes stands to significantly outstrip the settlement agreed upon by the two parties. A $20 million settlement preceded an action against the legal malpractice plaintiff that could result in a further $30 million in recovery, along with potentially hundreds of millions in civil penalties. A large amount of money is at stake in this case, but one might extend the same lesson to any malpractice negotiation.

The case in the Bloomberg article deals with allegations of incompetent or incomplete legal advice. FindLaw lists some of the other common bases of legal malpractice suits:

  • Missing a deadline due to negligence
  • Breaching confidentiality rules
  • Conflict of interest
  • Failure to perform due diligence

Participants in malpractice cases involving these or other violations of professional ethics often pursue settlements outside of court. However, it is often prudent to examine each settlement offer closely before accepting, due to the separate motivations of the parties involved.