Realizing your attorney made a multi-million-dollar mistake in a business dispute is bad enough. But finding out after the fact that you can’t hold them accountable because of a missed deadline? Even worse.
The statute of limitations is often the very first line of defense a law firm uses when sued for legal malpractice. They will argue that you waited too long, that you knew about the issue years ago, and that your right to recover losses has expired.
Navigating when the statute of limitations starts running in legal malpractice is a treacherous area of the law. I have prevailed in cases involving this issue, but of course my clients would have preferred never to deal with it at all.
Here is what business owners need to understand about how the clock works. Exactly when and how it starts will depend on the jurisdiction and how courts have interpreted the start of the clock.
The Continuing Representation Doctrine
To protect clients from being forced to sue their own lawyers while a case is ongoing, many jurisdictions apply the continuing representation doctrine.
Under this rule, the statute of limitations for suing an attorney generally does not start running while the attorney is representing you in the matter. You aren’t expected to derail ongoing litigation by suing the lawyer currently representing you.
How this doctrine is applied varies by jurisdiction. In some jurisdictions, the courts extend the doctrine to also include a new counsel who has adopted the old counsel’s advice or strategy, lulling the client into believing that there was no error (or the error had no consequence). The justification is similar: you are not expected to derail your litigation when you have been informed by counsel that the prior counsel’s advice was sound.
The “Actual Knowledge” Trigger: What Did You Know When?
In some jurisdictions, there is also a consideration of whether and when you actually knew your attorney made a mistake behind the scenes. Even if the attorney was representing you, did you know (perhaps reflected in an email) that your attorney had made an error? Did the attorney tell you, for example, that he made an error?
Depending on the jurisdiction and the particular circumstances, the statute of limitations may begin starting, and thus the window to sue your attorney for malpractice. If you sit on the actual knowledge that your attorney might have made a mistake and wait to see how things turn out, you can doom your claim before it ever gets filed.
In some jurisdictions and some circumstances, it may be enough that you had enough knowledge that you “should” have known about your attorney’s error to start the limitations clock. For this reason, remain diligent and consult with attorneys if you have any concerns about your current attorney’s fitness.
Advice for Navigating the Malpractice Clock
If you believe a former attorney committed malpractice that damaged your business or resulted in an adverse judgment, it’s important to understand the statute of limitations implications at the outset.
Here are the key steps to keep in mind:
- Prepare a Timeline: Before filing a complaint, map out when the mistake occurred, what advice you were given at the time, when you first gained actual knowledge of the error, and when the representation officially ended. Also
- Know Your State’s Rules: Statutes of limitations vary by jurisdiction. While two to three years is common, procedural requirements can differ significantly. For example, in Colorado, there is a strict requirement to file a “Certificate of Review” from a qualified industry expert early in the case, certifying that your malpractice claim is not without merit.
- Don’t Wait for the Dust to Settle: Malpractice is often not discovered until long after an adverse judgment is entered. But if you have any basis or reason to believe your attorney made a critical error, don’t wait. A court may decide later that you knew or should have known.
Need Help Assessing a Potential Malpractice Timeline?
If you suspect your current or former counsel has made a critical error in a commercial dispute, visit the Contact page of our website to schedule a confidential consultation.
