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The Rundle Law Firm

Q: Are there any special rules for legal malpractice cases involving lost settlement opportunities?

In a sense, yes, though one might say they simply represent the application and refinement of traditional rules of evidence governing relevance to prevent speculation on the part of the jury. If the attorney's mistake damaged the client because his or her mistakes killed a settlement, or because the client ended up settling the case for too little, the question becomes what the reasonable settlement value of the case actually was.

In Washington, it is not sufficient for the jury to simply hear the plaintiff’s expert opine that in his or her opinion the real settlement value of the case was $x. Griswold v. Kilpatrick, 107 Wn.App. 757, 27 P.3d 246 (2001). The factual, informational, or scientific basis of an expert opinion, including the principle or procedures through which the expert's conclusions are reached, must be sufficiently trustworthy and reliable to remove the danger of speculation.

Acceptable evidence would include testimony from the opposing party in the underlying matter that it was ready, willing and able to settle for a particular amount. That sort of evidence is hard to come by for a variety of reasons, including that the witness would be a formerly adverse party, usually with no love lost toward the plaintiff. Also, such witness may be concerned about waiver of attorney-client privilege. Clients often rely heavily on the advice of counsel in determining whether to settle and for how much, so the topic of settlement possibilities in the underlying case could be very much entangled with lawyer-client communications.

Alternatively, expert testimony may be offered in the form of an attorney with appropriate experience, who testifies that: 1) he or she was involved in factually similar cases, and can support that assertion, and/or 2) he or she can point to other specific settlements or verdicts as providing a foundation for his or her opinion. See Griswold.

This can sometimes be difficult, and often expert witnesses are reluctant to subject themselves to a heightened level of grilling about their background and experience than they must already undergo. For plaintiffs who settled the underlying case for too little, based on a flawed understanding about the merits of the case due to their lawyers negligence, this evidentiary hurdle can be a powerful incentive to dispense with the lost settlement opportunity theory altogether. Instead, a plaintiff might simply allege that he or she would not have settled the case with a full deck of information, and would have gone to trial. What would have happened at trial is for the jury to decide based on evidence presented in the case-within-a-case, sidestepping altogether the question of allegedly speculative settlements. This would leave it to the defense to enter allegedly speculative territory by arguing the underlying case would likely have settled for less than what plaintiff maintains was the likely judgment--a risky move.

Oregon appellate courts have not addressed the issue of lost settlement opportunities forming the basis of a legal malpractice claim with the degree of specificity as Washington has in Griswold. However, considering that the standard in Griswold reflects fairly traditional standards of relevance and avoidance of speculation, it is prudent to ensure that similar foundational evidence is available.

These articles are for informational purposes only. An attorney-client relationship is not established with this firm without express written agreement. If you have an actual legal matter, you should not rely on the statements or conclusion in these articles, but instead should seek legal representation.