Damages in a legal malpractice action
What’s the value of the case?
Generally, in Georgia, the value of the legal malpractice case is determined, in large part, by the value of the underlying case. As an example, consider a missed statute of limitation on a personal injury claim. The value of the legal malpractice case would begin to be measured by the underlying personal injury case. Naturally, there could be a range of values, both in settlement and to a jury. But there is generally no premium in value on legal malpractice cases just because they’re against a lawyer. (This fact surprises a lot of clients!) If separate and distinct facts exist that show that the lawyer breached a fiduciary duty (candor, loyalty, and diligence), then additional damages could be found which increase the value of the malpractice case.
Damages cannot be speculative
In an ideal legal malpractice case, the damages are fixed. For example, the lawyer failed to complete a transaction document which caused the client to lose out on a contract worth $100,000. But to recover damages in a legal malpractice claim, the damages that flow from the lawyer’s breach of duties cannot be speculative. What does this mean? In this example, that lost contract must have been certain of going to the client. The more doubt about that, the more likely a court is to find the damages are speculative.
Fixed damages could include specific claims against an individual or company with provable values. If there is a solid track record of revenue and profit stream over time, lost revenue or profits may be recoverable. Depending on circumstances, the cost of lawyers and experts—not the claimant’s time—may be recoverable, along with other litigation expenses. Generally speaking, damages that were proximately caused by the lawyer’s negligence or conduct, and are calculable, should be recoverable. Mere difficulty in calculating the amount of damages does not make them speculative under the law.
In contrast, speculative damages are usually not recoverable. For example, a new business venture, with no documented, historical track record of earnings, would probably not be allowed by the court. Or, a contract that could be terminated at any time, for any reason. In that case, a court may hold that the lawyer’s conduct was not the proximate cause of the lost contract, or the value of the contract as speculative, non-recoverable damages.
Proof requires evidence
A claimant needs evidence, too, to prove their case. Documents are always the best evidence. The more, and better, documents that a claimant has, the better their chances of a recovery. Documents can take the form of contracts, invoices, spreadsheets, financial statements, tax returns, or communications, especially e-mails and text messages. When it comes to a dispute about who said what, or what the parties intentions were, e-mails, text messages, and letters go a long way to proving these facts. If there are no documents to support a claim, the claimant must rely on a swearing contest of testimony which complicates the possibility of a favorable recovery.