Foreseeability and Policy Limits

Foreseeability and Policy Limits

Foreseeability is the most important consideration in deciding whether a duty exists, and the general statement of the rule comes from a case about a therapist, Tarasoff v. Regents of the University of California. The California Supreme Court wrote that a defendant owes a duty of care to all persons who are foreseeably endangered by his conduct, with respect to all risks that make the conduct unreasonably dangerous.¹ Read alone, that sentence seems to invite broad liability, because a lawyer's careless work can foreseeably hurt people who never hired the lawyer. But Tarasoff is not a lawyer case, and it does not make lawyers answerable to every foreseeable victim.

Tarasoff itself hedges the rule. When avoiding a foreseeable harm would require the defendant to control another person's conduct, or to warn of it, the common law has traditionally imposed liability only if the defendant bears a special relationship to the dangerous person or to the potential victim.² The therapist-patient relationship met that requirement, so the court expressly left open whether foreseeability alone is enough to create a duty to protect a potential victim of another's conduct.³ The lawyer cases take up the question Tarasoff reserved, and they answer it by requiring more than foreseeable harm.

Foreseeability cannot draw the line for lawyers, because it marks only who could be hurt, and a lawyer can foresee harm to somebody in almost every representation. A short hypothetical shows how far the test would reach.

Courts therefore treat foreseeability as the starting point and add policy limits. Line-drawing is necessary because courts deciding responsibility for negligent acts must look past the immediate facts to the larger principles at stake, including the need to limit the legal consequences of wrongs to a controllable degree.⁴ Legal malpractice law as a whole tries to balance the public's interest in consumer protection against the profession's need for discretion in representing clients, and lawyers should answer for harm from their misconduct without liability sweeping so broadly that it hinders the practice of law.⁵ A lawyer who owed care to a crowd of strangers could not freely use the discretion needed to represent the client effectively. The policy limits are how courts strike that balance for people outside the representation.

The divorce-lawyer cases show the limits at work on facts where the harm is about as foreseeable as harm can be. In Scott v. Burgin, a client died before his divorce was final, and his fiancée lost a pension as a result. The court held that the lawyer's duty of care did not extend to her.⁶ A divorce lawyer can readily foresee that a client's intended spouse may depend on the outcome, so foreseeability was not the missing element. The court declined to recognize a duty that would have to reach everyone else whose plans turned on the client's timetable.

Physician cases follow the same pattern, which shows that the limit belongs to professional-services liability generally. In Cohen v. Cabrini Medical Center and Dehn v. Edgecombe, courts declined to extend a physician's duty to a patient's spouse. They treated the existence of a duty as a question of public policy and line-drawing as well as foreseeability.⁷ Cohen shows that even a single, easily identified plaintiff needs more than foreseeable harm. Dehn shows the worry behind the rule, which is that a class with no stopping point means the duty has been drawn too wide.

The limit does not shut out every nonclient. In Prudential Insurance Co. v. Dewey, Ballantine, Bushby, Palmer & Wood, the New York Court of Appeals held that a law firm may be liable to a nonclient who relied on the firm's opinion letter.⁸ A lender who relies on such a letter when making a loan stands differently from the fiancée in Scott, because the reliance is part of what the lawyer's own work invited. The undertaking identifies the person who will rely on it, so the duty has a defined edge and does not ask the lawyer to serve a crowd. Foreseeability joined with invited reliance can therefore support a duty where foreseeability alone cannot. Invited reliance is one of the recognized exceptions to the no-duty default, and a later section develops it.

An exam stem that offers a sympathetic, foreseeable victim who never hired the lawyer is testing exactly this point. Foreseeability is where the analysis starts. The answer must go on to ask what ties the plaintiff to the lawyer's undertaking and whether recognizing a duty would open liability to an unmanageable class. These limits govern claims built on a duty of care. How far liability reaches also depends on how blameworthy the lawyer's conduct was, because a lawyer who intentionally misrepresents a fact may be liable to a wider class of plaintiffs than one who makes a merely negligent misstatement.⁹ Claims built on fraud or on knowing assistance of a client's wrong rest on different theories, which a later section takes up.