The right to sue an incompetent professional that causes harm is a staple of our legal system. Whether a doctor leaves a surgical instrument inside a patient, or an accountant thoroughly bungles a company’s tax return, an aggrieved party has the right to legal redress for damages. The same standard applies to an incompetent attorney who commits malpractice.
Oddly enough, lawyers are the only professionals entitled to regulate themselves. Doctors and accountants are subject to professional codes, but in the end, their competence is decided in a courtroom run by lawyers.
This privilege of attorneys self-regulating is a dynamic worth noting in an ongoing dispute between Jarrow Rogovin, the head of the well-known supplement producer Jarrow Formulas, and the law firm McCarter & English, who Rogovin claims utterly botched his defense in a trade secrets case filed by Caudill Seed and Warehouse Company, costing him millions. Yet Rogovin’s claim of malpractice and McCarter’s countersuit of payment for legal service has morphed into a three-ring circus in the Connecticut District Court, and the outcome could have a chilling effect on clients’ rights to adequate legal representation.
Breaking with long-established precedent in state common law, Judge Shea, a Connecticut federal judge, is asking the state’s Supreme Court to determine whether punitive damages can be assessed by a law firm against a non-paying client, even when the client has made a good faith claim that his attorneys’ failure to exercise due care in their representation resulted in significant financial loss. If punitive damages are granted in this case, it would trigger a seismic shift in the law that could signal a death knell for clients’ rights and create a chilling effect on future malpractice claims.
Punitive damages are typically only available in breach of contract cases in the most extreme circumstances of egregious or “malicious” conduct, which is what McCarter is claiming in their collections lawsuit, seeking punitive damages. But Rogovin’s case and rationale for not paying is entirely conventional. He accuses his attorneys of failing to adequately rebut the testimony offered by the opponent’s expert witness, failing to perform their own research, and relying primarily on documents provided by opposing counsel. This is a highly unorthodox approach in a trade secrets case, where discovery is essential to determining the value of the disputed trade secret. Rogovin’s lawsuit further alleges multiple failures to use favorable expert witnesses at trial, including another witness who would have testified to McCarter’s negligence in losing the Caudill lawsuit.
The case against McCarter soon became personal, with Rogovin claiming he was assaulted by his former attorney. Rogovin further disputed McCarter raising their billing rates without proper notice, though they were intimately aware of his company’s well-documented financial struggles. Regardless of the intervening drama, the record is clear that Rogovin was billed millions of dollars for legal representation he viewed as inadequate, with little indication his failure to pay was “malicious” and warranted punitive damages. In the end, McCarter billed 6 million dollars for losing the case and then sought 1.8 million more.
McCarter’s request for 3.6 million in additional punitive damages reads like a Hail Mary legal gambit that should have been summarily rejected by the judge. The firm itself is also facing a very public multimillion-dollar biotech malpractice suit, and its legal strategy seems to be that going on offense is the best defense. Alleging the most outrageous and extreme conduct by Rogovin did the trick, convincing a judge that a dissatisfied client was not merely without legal merit but irreconcilably unhinged.
To help accomplish this feat, McCarter sent an S.O.S. to the legal community to circle the wagons, and their message was answered. The head of the Connecticut State Bar Association, James Shearin, testified as an “expert” witness for McCarter, even though Shearin admitted under cross-examination that he had never tried a trade secrets case. This did not prevent the “expert” Shearin from using his testimony to attack Rogovin’s character and assert he was culpable in the Caudill lawsuit. This testimony directly conflicted with the position that McCarter took - on the record - when representing Jarrow in that same case.
Shearin’s appearance was an obvious signal as to which side the influential state bar stands. In agreeing to allow his testimony without clarifying Shearin’s relevant expertise, the judge opened himself up to questions of prejudicial error. The Supreme Court’s decision should not be difficult in rejecting certification for punitive damages, but should they make the wrong call the effect will be devastating. If punitive damages are granted, it could trigger a seismic shift in the law, that could signal a death knell for clients’ rights, and create a chilling effect on future malpractice claims.
Novel legal decisions are frequently adopted in other jurisdictions, meaning a real possibility exists that legal malpractice claims could soon be fertile ground for countersuits involving devastating punitive damages against aggrieved clients. If this test case goes the wrong way, it will send a message that any well-heeled law firm can offer subpar service and leverage the threat of punitive damages against any client who dares challenge them. The outcome should be watched closely to see if the legal community, accountable only to itself, is granted this de facto immunity from future malpractice.
Gerard Scimeca is an attorney and is co-founder and chairman of CASE, Consumer Action for a Strong Economy, a free-market-oriented nonprofit consumer organization.
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