Liability for Changes to the Law?

Although it is uncommon to ignore legal precedent, it does happen from time to time when it is outdated, no longer applicable or due to the political/philosophical makeup of the presiding judiciary. Also, new laws can create problems for attorneys.  When the law is clear, an attorney’s obligations are clear – he or she must apply the applicable law to the facts of the case.

What happens, though, when the applicable precedent is overruled altogether?  The attorney cannot be expected to anticipate the change of law, right?

A recent decision holds that an attorney does not have an obligation to anticipate a change in precedent. In Minkina v. Frankl, the Massachusetts Supreme Judicial Court declined to hold that a defendant law firm committed malpractice when it failed to anticipate a substantial change in the law that eliminated the existing precedent.

The Case
In the dispute, the law firm represented a plaintiff in an employment discrimination suit.  At issue was an arbitration provision in the plaintiff’s employment agreement and its enforceability.  The defendant sought to enforce arbitration by pointing out a well-established precedent that supported the provision’s enforceability.  The court ruled in the defendant’s favor and compelled arbitration.

However, after the decision was rendered, the Supreme Court actually changed the associated law thus eliminating the well-established precedent.

After the Supreme Court decision, the plaintiff then sued his former counsel alleging that the firm was negligent in its failure to anticipate the change in law.  The law firm successfully moved for summary judgment using the argument that it had no duty to foresee the changes.  The Supreme Court held the decision on appeal.

The Supreme Court’s decision affirms that attorneys have an obligation to apply the current law, but cannot be expected to anticipate changes to the law or its established precedent.  This is simply too high of a standard to hold an attorney.

What this case does do, though, is highlight the need for attorney malpractice insurance.  While the suit against the law firm held no merit, there were still costs associated with defending the firm.  A solid malpractice policy, in addition to paying any necessary claims, provides all necessary defense costs (above the applicable deductible) to exonerate the accused party.

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