On Dec 21, 2004, at 9:01 PM, Craig White wrote:
> Excuse my ignorance...I am not a lawyer and have made only limited
> efforts to understand narrow aspects of the law.
>
> If you get an opinion from a lawyer and it turns out that you act on
> that opinion and are sued and lose, does that automatically constitute
> malpractice and thus, you can make claim against that lawyers
> malpractice insurance?
>
> My understanding is that you would have to prove that the advice given
> by the lawyer actually constituted malpractice and that if the lawyer's
> advice hedged in some area that ultimately proved to be significant,
> this might prove extremely difficult to collect. Thus the concept of
> buying a $1 or $3 or $50 million opinion based upon potential recovery
> of damages from malpractice insurance is possibly theoretical and not
> guaranteed. Rarely are these issues so black and white where the advice
> given obviously constitutes malpractice.
>
> I believe you when you state that your company contracted for an
> outside
> opinion but is is possible that the outcome of all potential litigation
> in that matter was guaranteed by his malpractice insurance? I don't
> recall getting any guarantees from a lawyer about anything except death
> and taxes.
Here's how it was explained to me. If you get a judgment against you
and it is clear that the opinion you got was wrong *as a matter of law*
the firm that issued the opinion and the partners in that have to pay
up to stay in business. No one will ever go to them for an opinion
again if they welch. What would be the point?
However the opinion will be very narrow. I the one I was involved in,
had pages of recitations of facts as provided by our company. That was
my involvement. I was the source for some facts. If we lost a suit
because we had misrepresented any one of those facts, or even if we
hadn't but failed to persuade a judge or jury, all bets were off. If a
case ever even got to a jury all bets were off because judges aren't
supposed to let juries hear cases where there are no facts in dispute.
If we were sued pursuant to some statute other than the one that was
the specific subject of the opinion, all bets were off.
I guess I can be a little more specific here. We were engaged in a
project that we thought was eligible for tax exempt financing. We knew
that if the IRS ever ruled that our project didn't qualify, people who
bought our bonds would sue us. The opinion we got said that a law
provided for tax exempt financing. I believe to this day that if some
court had said "No, that law doesn't provide for tax exempt bonds at
all. You've completely misread it." then the firm that gave us the
opinion would have stepped in an settled the suits. However it was very
clear at the time that if a court said, "Sure there are tax exempt
projects under this law but your specific project doesn't qualify" then
we would be SOL because that would be a finding of fact. It wouldn't
contradict the opinion that the law provided for tax exempt financing.
I though this was fascinating at the time. You are absolutely correct
that no law firm is going to give you blanket assurance against losing
a law suit. They only guarantee that their narrowly written opinions
are correct.
---
If you came and you found a strange man... teaching your kids to punch
each other, or trying to sell them all kinds of products, you'd kick
him right out of the house, but here you are; you come in and the TV is
on, and you don't think twice about it.
-Jerome Singer
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