Welcome to the Editor's corner! This issue of the T.L.I.E. Advisory highlights the battleground of suits filed against opposing counsel, in litigation and non-litigation matters.
As Mr. Shepherd's article this issue emphasizes, the law in Texas courts (both State and Federal) has turned within the last three years toward insulating attorneys from being sued by opposing counsel, both in litigation and non-litigation matters. Although it appears under Barcelo v. Elliott and related cases that a party cannot now successfully sue his opponent's counsel for negligence, conspiracy, or fraud, lawyers can still be held accountable under the Rules of Civil Procedure, Civil Practice and Remedies Code, and the Government Code, for reckless or intentional conduct by a lawyer occurring during representation of a client. Disciplinary sanctions remain an administrative avenue for a non-client to assert claims against an adversary's lawyer.
While these developments are generally beneficial to lawyers, they do not provide immunity from suit. Allegations of reckless, intentional, or sanctionable conduct may give rise to coverage questions in regard to defense. Generally, a professional liability policy will contain an express exclusion from coverage for acts, errors, or omissions, due to alleged fraud, conspiracy, or dishonest conduct, even though the alleged conduct would be covered otherwise in the context of professional legal services. Therefore, if a lawyer were to be sued by the opposing party (or counsel) in a given matter, the carrier's coverage exclusions would be narrowed to those of intentional conduct or offenses subject to court-imposed or administrative (licensure) sanctions.
In that event, so long as other prerequisites of the policy have been met by the insured in reporting the claim, and assuming there are at least one or more covered allegations in the pleadings filed against the insured, the legal malpractice insurer might offer a defense under a reservation of rights. Such a qualified defense creates the potential that the carrier might later deny liability for the losses attributable to claims of intentional and/or sanctionable conduct. If the claims alleged against the lawyer by the opposing party were confined to those of intentional or sanctionable conduct, then the insurer might decline both coverage and a defense.
Potentially, then, in the wake of Taco Bell Corp. v. Cracken, Bradt v. West, Barcelo v. Elliott, and related cases, here is the worst-case scenario. A lawyer could be sued by the opposition for intentional or sanctionable conduct, and yet not be entitled to coverage or a defense. What, then, is the lawyer's best preventive medicine against such an undesirable crisis? Often, the lawyer may be urged by a "demanding" client to engage in "hardball" tactics. Whether it is at the lawyer's own instance, or at the urging of a difficult client, the responsibility rests with the lawyer to determine if such zealous representation of the client has crossed (or would cross) the boundary of intentional or sanctionable conduct. If so, then it is incumbent on the lawyer, professionally and practically, to protect both the client and the lawyer's own interests, by refraining from tactics that could invite such claims by the opposition. It is axiomatic in the defense of legal malpractice suits, that clients who are so demanding are generally prone to turn against their own lawyer, when claims are alleged jointly against both client and lawyer by the opposition.
The frequency of claims asserted by the opposition against a lawyer in a non-litigation context is not as great as in litigation matters. It has been relatively common in recent times to see one party asset claims in litigation against the adversary's lawyer, in order to delay, harass, or create a putative conflict of interest between the lawyer and the client. In such events, responsibility rests also with the judiciary to dismiss such manipulative claims, thereby discouraging the filing of them. To do otherwise deflects the attention of the courts from the merits of the controversy to resolving retaliatory personal attacks. That results in unproductive docket delay and unnecessarily increases the cost of litigation for all.
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