The litigation privilege does not preclude a malpractice claim against a lawyer who allegedly made statements that jeopardized his client’s professional liability coverage, the New Jersey Appellate Division has ruled in reversing a dismissal.
The plaintiff and the defendant are both attorneys. When the plaintiff was sued for mishandling a client’s bankruptcy case, the plaintiff’s professional liability insurer assigned the defendant to handle the case. In seeking authorization to settle the lawsuit against the plaintiff, the defendant submitted a form to the insurer expressing the opinion that the plaintiff had engaged in bankruptcy fraud in his client’s case.
Based on this information, the plaintiff’s insurer disputed its coverage obligation, citing an exclusion in its policy for claims arising from fraudulent conduct.
After establishing his right to coverage, the plaintiff sued the defendant for malpractice. According to the plaintiff, the defendant breached a duty by expressing an opinion contrary to the plaintiff’s best interest.
The defendant argued that the lawsuit was barred by the litigation privilege, which generally immunizes an attorney from liability for statements made in the course of litigation.
But the court concluded that the privilege did not apply in this context, explaining that “the litigation privilege does not protect an attorney from a claim by his or her client based upon statements the attorney made in the course of a judicial proceeding where, as in this case, it is alleged that the attorney breached his duty to the client by failing to adhere to accepted standards of legal practice.”
New Jersey Appellate Division. Buchanan v. Leonard, No. A-2243-11T4. Oct. 9, 2012. Lawyers USA No. 993-3550.