December 12, 2018 Top Story

Framing Legal Malpractice as Negligence Saves Claims

State law prohibiting fraud claim assignments inapplicable to malpractice claims

By Kristen L. Burge

Legal malpractice claims predicated on professional negligence may survive assignment when those sounding in fraud do not.

The startup's executive was caught using the company's investment for personal use

The startup's executive was caught using the company's investment for personal use

iStockphoto by Getty Images

Where state law prohibits assignment of fraud claims, close review of counsel’s failure to report wrongdoing to its corporate client saved the assigned malpractice claims in Lucky Management, LLC v. Miller & Martin. Careful examination revealed the allegations did not “mention, much less specifically allege” fraud, and thus, state law permitted assignment. As Lucky illustrates, knowing the law on claim assignment is key for law firms litigating these third-party claims.

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