Understanding the Applicable Statute of Limitations

Knowing the applicable statute of limitations for your case is critical for every attorney.  In the world of legal malpractice, there are many variables in play: the jurisdiction, the facts, tolling and the extent of the underlying representation. Therefore, it’s important for attorneys to know the various nuances of the statute of limitations doctrine in their jurisdiction.  For this reason, attorneys will want to take note of a recent decision out of the South Carolina Supreme Court that overruled precedent on when a legal malpractice claim begins to run.

In Stokes-Craven Holding Corp. v. Robinson , the plaintiff appealed a dismissal of all legal malpractice claims in favor of a law firm based upon the expiration of the statute of limitations.  Plaintiff – an automobile dealership – was on the wrong end of a large jury verdict. Following the verdict, the dealership appealed to the Supreme Court which ultimately affirmed the jury’s verdict but issued a remittitur, reducing the amount of punitive damages.

It wasn’t until after the court affirmed the jury verdict when the plaintiff filed a malpractice claim against the law firm that represented it during trial.   Defendant law firm filed a motion for summary judgment on statute of limitations grounds arguing that the claim accrued when the jury rendered its verdict and had expired.

On appeal, plaintiff argued it did not know that it might have a claim for legal malpractice on the date the verdict was entered.   The state supreme court overruled prior precedent and held that “the statute of limitations for a legal malpractice action may be tolled until resolution on appeal of the underlying case if the client has not become aware of the injury prior to the decision on appeal.”

The court noted that this new rule provides a threshold limit to the tolling of the statute of limitations while still advancing the purpose of the statute of limitations, which is to protect against stale claims and punish litigants who delay in asserting their rights.

Most jurisdictions allow some form of tolling if the client is not aware of the injury or could not reasonably become aware of the injury.  When and if a statute is tolled often depends on specific facts.  The rule set forth by the South Carolina Supreme Court puts a hard deadline on when the tolling stops and eliminates the room for guesswork as to when the statute begins to run.

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