Concept
Damages
Civil liability to client, including malpractice
Damages
Damages is the last of the four elements a negligence plaintiff must prove, after duty, breach, and causation.1 Restatement (Second) of Torts § 281 compresses the same structure into one rule: an actor is liable for an invasion of another's interest if the interest is protected against unintentional invasion, the actor's conduct is negligent toward the plaintiff or a class of persons that includes her, that conduct is a legal cause of the invasion, and the plaintiff has not disabled herself from suing.2 A client who has cleared duty, breach, and the requirement in § 281(c) that the lawyer's conduct be a legal cause of the invasion has one question left: what is the invasion worth in dollars?3
The answer comes from the same reconstruction that decided causation. The client usually must prove how the underlying matter would have come out had the lawyer performed properly, whether that matter was a lost lawsuit, a spoiled transaction, or a settlement accepted too cheaply. Damages asks the follow-up question: not whether the client would have done better, but how much better. The figure is only as solid as the proof behind the reconstructed world, so a client who proves a plain breach can still recover little if the better result was modest or could never have been realized. Three adjustments shape the number: whether the lost award could have been collected, whether the benchmark is a verdict or a settlement, and whether a fee comes off the top.
Clients may also ask for money that the case-within-a-case reconstruction cannot supply. Damages for emotional distress and punitive damages turn on the lawyer's conduct and the client's feelings, not on what the lost case would have paid. Whether either category is open depends in part on the kind of fault the client can prove, ordinary negligence or something worse. The first subsection takes up the compensatory measure, and the second takes up distress and punishment and the limits on each.
Compensatory Recovery
Compensatory damages put the client where a competent lawyer would have put her, so every case asks what she would have had if the work had been done properly.4 When the lawyer's error cost her a litigation result, whether by missing a limitations deadline or by negotiating an inadequate settlement, she must ordinarily prove what she would have recovered had the case been tried properly or, if she was the defendant, what losses proper representation would have spared her.5 The reconstruction that decided causation thus decides damages too, and the award can be no more reliable than the proof of the lost case.
Because the measure is anchored to the lost case, the recoverable items are the items that case would have contained. A client who would have recovered a fund of money or a share in property is entitled to its value from the lawyer, and one who would have recovered lost wages, medical expenses, pain and suffering, emotional distress, or lost consortium may recover those items from the lawyer as well.6 The anchor serves a principle: a client should recover in compensatory damages what she lost, and no more.7 An award below the lost case's value leaves her short of the position competent counsel would have reached, and an award above it gives her something the underlying suit never offered. The distress item here is distress that the underlying claim would itself have compensated. Whether a client may recover for distress that the lawyer's own conduct caused is a separate question for the next subsection.
The same measure applies when the client was the defendant: she recovers the difference between her actual position and the position competent counsel would have produced.
Proving that the lost case would have been won does not finish the job, because a judgment is worth only what a creditor can collect on it. Most courts therefore require a client who claims she would have recovered a judgment, or a higher one, to establish that the judgment would have been collectible against the adversary in the underlying case.8 The compensatory principle drives the rule: a client who could never have collected has no loss to compensate.9
Courts apply the requirement in varied settings. A 2019 decision, Lehouillier & Associates, PC v. Gallegos, required the client to prove that a lost judgment against a radiologist would have been collectible and gave adequate malpractice insurance as one way to prove it.10 Insurance is natural proof because a policy with adequate limits stands behind the judgment whatever else the defendant owns. The Texas Supreme Court in Akin, Gump, Strauss, Hauer & Feld, L.L.P. v. National Development and Research Corp. added that collectibility is measured at the time the judgment would have been entered, and Ohio's Paterek v. Petersen & Ibold likewise puts the burden of proving collectibility on the plaintiffs.11
A minority of courts assign the burden the other way and make the lawyer prove that the judgment would not have been collectible. They typically reason that the lawyer's malpractice created the problem of uncollectibility in the first place, so the uncertainty it left behind should cost the lawyer rather than the client.12 In Schmidt v. Coogan, the Washington Supreme Court acknowledged that a majority of jurisdictions require the plaintiff to prove that she would have won, how much the award would have been, and that it was collectible, yet agreed with the minority and treated uncollectibility as an affirmative defense that the defendant must plead and prove.13 The substantive measure is the same in both camps, because a judgment that would have produced nothing is worth nothing. The split decides who loses when the evidence about the adversary's finances is thin.
The radiologist in Lehouillier and the contractor here differ in one respect, the ability to pay, while the proof of breach and of the underlying merits could be identical for both. An exam stem that says only that the client would have won a large verdict has therefore left collectibility unproved in a majority state, and the answer should say so.
The harder question is which number the fact-finder uses when the lost case would probably never have reached a verdict, because most cases settle.14 Settlement values shift during long preparation and negotiation, and verdicts are hard to predict, so the fact-finder must choose between estimating the probable verdict and estimating the likely settlement.15 The evidence about what competent counsel would have produced makes the choice. A client who proves that she would have gone to trial and won recovers on the verdict, and a client who shows that a settlement was likely in a given amount, or within a given range, recovers on that amount.16 Because the measure is the position a competent lawyer would have reached, a verdict figure overstates or understates the loss whenever that position was a settlement.
Courts also divide over whether a reasonable fee comes off the award. A client who would have won a collectible verdict would ordinarily have owed his lawyer a fee out of it, so recovering the full verdict from the negligent lawyer would leave him better off than winning would have; for that reason some courts deduct a reasonable fee from the malpractice judgment.17 Other courts refuse any deduction. They reason that the negligent lawyer earned no fee, and that the client may have incurred fees to pursue the malpractice claim, so deducting the lost-case fee would make him pay for legal services twice.18 The second argument draws strength from the American rule, under which each party bears its own attorney's fees, malpractice litigation included.19 On a lost verdict of $300,000 that would have carried a $100,000 fee, a court that deducts awards $200,000, and a court that refuses to deduct awards $300,000. The deduction concerns only the fee the client would have owed her own lawyer, and because jurisdictions split, a complete answer states the split and gives each side's reason. Who ultimately pays an award is the subject of the sections on firm liability and insurance.
Emotional Distress and Punitive Damages
Restatement (Second) of Torts § 281(a) makes an actor liable only for the invasion of an interest that the law protects against unintentional invasion, and that condition frames this subsection: which of the client's interests beyond the money at stake can a careless lawyer be made to pay for?21 The client's interest is usually financial, a claim, a fund, or a deal placed in the lawyer's hands, and legal malpractice is one of the cases in which a defendant who owes a duty through an undertaking or special relationship answers in negligence for pure economic harm.22 Malpractice is therefore mainly an economic tort. In keeping with the general attitude toward economic torts, most courts either hedge emotional distress damages with special limitations or reject them outright, although a few have said without qualification that recovery is allowed where the distress is severe.23 Punitive damages, which punish a wrongdoer rather than compensate a victim, form a separate and narrower category. This subsection takes distress first and punishment second.
Courts state the restriction on distress damages in several ways. A 1996 decision shows how tight it can be: emotional distress is an element of damages only if the plaintiff suffers physical injury, is exposed to physical injury through another's negligence and develops physical symptoms after the distress, or suffers distress from a direct invasion of rights such as slander, libel, malicious prosecution, seduction, or other willful, wanton, or malicious conduct.24 Under that formulation, ordinary carelessness that costs a client money does not support distress damages. Other courts go further and refuse damages for distress that results from the other losses the lawyer's negligence caused, because that distress is not generally foreseeable.25
Two reasons explain the restriction. Nearly every client who loses a claim or a bargain is upset, so if upset were compensable alongside the loss, every malpractice complaint would carry a second damages claim that rests on testimony about feelings, resists testing, and has no ceiling tied to the dollars at stake. And distress that grows out of a financial loss is a second-order consequence of the lawyer's carelessness: a lawyer hired to protect money cannot ordinarily foresee that a mistake will injure the client's peace of mind. The recognized exceptions apply when one of those premises fails, either because the lawyer's conduct was wrongful enough that the lawyer should answer for its human cost, or because the representation concerned an interest where distress is the natural result of failure.
The Washington Supreme Court drew the line in Schmidt v. Coogan. It held that emotional distress damages are available for attorney negligence only when the distress is foreseeable because the lawyer's conduct was particularly egregious or intentional, or because the representation was sensitive or personal in nature, and it denied them for the loss of compensation in a slip-and-fall case.26 On those terms, a client who has lost money to a lawyer's ordinary carelessness has no ground for distress damages.
Miranda v. Said sits on the other side of the line. A lawyer's malpractice in an immigration matter resulted in parents being separated from their young child, and the Iowa court allowed emotional distress damages even though Iowa generally requires intentional conduct or physical injury before awarding them.27 The interest at stake made the difference: the Washington client sought money, and the Iowa clients sought to keep their family together. In Miranda the distress was the central injury, not a side effect of a financial loss, which answers both the foreseeability objection and the worry about open-ended claims. The pattern is that courts allow recovery when the representation itself carries a risk of substantial distress if it fails.
Liberty is the clearest non-economic interest. Recovery of emotional distress in civil malpractice is difficult and rare, but an unjustified loss of liberty caused by a defense lawyer's negligence makes distress a foreseeable consequence, and at least one court has said that recovery should turn on the nature of the interest harmed, not merely on how reprehensible the lawyer's conduct was.28 Where a liberty interest rather than an economic one has been invaded, substantial distress damages may be awarded on proper proof. In Wagenmann v. Adams the First Circuit affirmed $50,000 for a plaintiff wrongly held in a state mental hospital for a single night who proved lasting emotional effects.29 Even then, the client must prove that the lawyer's negligence caused the distress, as distinguished from the usual stresses of an encounter with the criminal justice system.30
Courts do not agree on liberty cases. In Dombrowski v. Bulson, the New York Court of Appeals refused to depart from the rule limiting legal malpractice recovery to pecuniary damages in a criminal-defense case, reasoning that distress awards could chill the willingness of an already strapped defense bar to represent indigent accused and could give lawyers an incentive not to take part in post-conviction efforts to overturn wrongful convictions.31 An exam stem on this point will usually say which approach governs.
One category of distress damages sits outside the economic-tort limits, and it is easy to confuse with the rest. When the lawyer's error cost the client a lawsuit, the client recovers what the lost case would have produced, so if the underlying claim would have compensated pain and suffering, emotional distress, or loss of consortium, those items are recoverable against the lawyer.32 That award measures the value of the lost claim and belongs to the compensatory recovery just discussed. It says nothing about whether the lawyer's own carelessness caused compensable distress.
A client can also reach distress damages under a different label. An attorney may be liable for intentional infliction of emotional distress where the elements of that tort are met.33 The Mississippi court in Pierce v. Cook affirmed a $1 million verdict on that theory against a lawyer who had an affair with his client's wife.34 The intentional tort carries its own elements, including causation, so proof that the lawyer behaved badly does not carry the damages claim by itself.
Punitive damages raise two separate questions in a malpractice case, and keeping them apart is the main exam skill here. The first concerns the lawyer's own conduct, and the second concerns the punitive damages the client would have collected from someone else in the lost case. The first follows the ordinary function of the remedy: a lawyer whose behavior is malicious enough to warrant punishment can be made to pay punitive damages for that conduct.36 Kentucky's decision in Osborne v. Keeney noted that punitive damages would be available for the legal malpractice itself if the plaintiff can prove malice.37 Even then the award is a windfall, not a right, and a showing of malice authorizes the jury to punish without requiring it to.38
The second question arises from the case-within-a-case measure. If the client would have recovered punitive damages from the original wrongdoer, the logic that makes lost compensatory items recoverable might seem to carry the lost punitive award along, even though the lawyer was merely negligent. Courts split, and the decisions run in both directions.39 California in Ferguson v. Lieff, Cabraser, Heimann & Bernstein, Illinois in Tri-G, Inc. v. Burke, Bosselman & Weaver, and Kentucky in Osborne hold that lost punitive damages are not part of the claim against the lawyer.40 Arizona in Elliott v. Videan and South Dakota in Haberer v. Rice reach the opposite result, and a federal court applying District of Columbia law in Jacobsen v. Oliver did the same.41 Many courts do not allow recovery of punitive awards that would have been won in the underlying action.42
The majority view rests on what punitive damages are for. They exist to punish and deter the person who committed the original wrong, and collecting them from the lawyer reaches someone else, so the original wrongdoer is neither punished nor deterred.43 They are also a windfall that a jury may decline to award however clear the misconduct, so an award against the lawyer would require a speculative reconstruction of what a hypothetical jury would have done.44 The minority applies the compensatory logic directly: the client lost the chance at a verdict that included the punitive award, and the lawyer's fault destroyed that chance.45
The two punitive questions are independent. The Kentucky court in Osborne denied lost punitive damages while recognizing that punitive damages for the lawyer's own malice remain available.46 An exam stem that describes a negligent lawyer and a reckless original defendant is therefore asking the second question, where the usual answer is no recovery, and a stem that describes a lawyer who acted maliciously toward the client is asking the first.