The role of a litigator often goes beyond simply performing the tasks necessary to prosecute or defend claims, such as filing pleadings, taking discovery, and preparing motions. Instead, clients may rely on their attorneys to also serve as counselors with respect to strategic decisions, such as whether to file a lawsuit in the first place or with respect to settlement strategies.

In furtherance of these goals, clients often request that attorneys evaluate the likelihood of success for a claim and the potential verdict. Given the many uncertainties inherent in litigation, attorneys can struggle to balance the desire to provide clients with meaningful evaluations and the need to account for the many unexpected or unpredictable contingencies that may impact the outcome of a matter.

Some clients, especially those that are experienced litigants (such as insurers providing a defense for insureds), view evaluations as something of a mathematical equation that requires assigning a likelihood of success on claims multiplied by the total potential exposure. That practice may be used to determine a reasonable settlement value for the case and, in some instances, the client may reject settlement offers or demands in reliance upon the calculation performed by defense counsel. Unfortunately, however, this can create risk that clients do not appreciate that their attorneys are simply projecting what they believe is likely to occur, as opposed to guaranteeing an outcome.

Certainly, in some instances, an attorney may fail to incorporate applicable law into their assessment or fail to alert the client of damaging facts that would impact the case. However, even where the attorneys carefully consider the facts and applicable law, in many cases there still remains a likelihood of an outlier result, especially when a jury is involved. Clients nonetheless may seek to blame attorneys where they refuse to settle in reliance upon their attorney's evaluation and then ultimately recover nothing at trial (for plaintiffs) or are hit with a large judgment (for defendants).

Thankfully, most courts do not impose strict liability on attorneys when it comes to predicting the future. Instead, as with other alleged acts of malpractice, courts typically consider whether evaluations were sufficiently informed so as to meet the standard of care exercised by attorneys in the same jurisdiction. Some states, including California, also consider whether certain doctrines may shield attorneys from liability based on their exercises of judgment. Below are some of the key considerations in determining whether an attorney's valuation might lead to potential liability for legal malpractice.

Standard of Care

The local bar rules are often viewed as instructive authority regarding the standard of care attorneys must meet during the course of a representation. In particular, Rule 1.1. of the California Rules of Professional Conduct requires that an attorney provide a competent representation to a client. "Competence" in performing legal services is defined in part as the "learning and skill … reasonably necessary for the performance of such service."

Typically, it is sufficient for an experienced attorney to thoroughly review the facts and, relying on her or his experience with similar cases, make an educated conclusion regarding the client's likelihood of success. Documenting the review of the record, known facts, and applicable law can help show that the attorney exercised the requisite level of skill in preparing the assessment.

Of course, what qualifies as skill necessary to perform a service in a given practice area could vary by jurisdiction or even by practice area. An attorney evaluating a matter pending in a specialty court, for example, may have different obligations in the analysis than an attorney evaluating a run of the mill contract action.

Judgmental Immunity Doctrine

In recognition that making judgment calls is a part of litigation, California courts have applied certain doctrines that can protect against the suggestion that an attorney's exercise of judgment fell below the applicable standard of care. For example, California attorneys may be able to cite the judgmental immunity doctrine as a defense to claims based on an allegedly inaccurate valuation. The doctrine "relieves an attorney from a finding of liability even where there was an unfavorable result if there was an honest error in judgment concerning a doubtful or debatable point of law," as in Blanks v. Seyfarth Shaw, 171 Cal. App. 4th 336, 378, 89 Cal. Rptr. 3d 710, 743 (2009) (citations omitted). Other jurisdictions have a similar doctrine referred to as the "professional judgment rule."

Accordingly, when there may not be directly applicable case law regarding key issues to be resolved in a matter, it can be helpful for attorneys to identify the lack of precedent as an issue that may impact the case or otherwise to document the reasoning underlying their assessment. Having this information in writing can act as a shield in the event that the client later questions whether the attorney took adequate steps in considering the client's potential liability.

Circumstances Involving Insurers

As noted above, sometimes an attorney may be assessing a claim for a client whose defense is being funded by an insurance company. In such situations, the insurer may ask defense counsel to prepare a valuation for the insurer's use in determining whether to consent to a settlement.

Although such a request may suggest some direct relationship between the insurer and the defense counsel, in many states, even when the insurer relies on defense counsel's valuation, the insurer's duties are nondelegable. The insurer thus may engage in its own independent analysis of the merits of the claim against the insured in order to determine an appropriate settlement value, even if the insurer is dependent or relying on the defense counsel's review.

In any context, providing an evaluation regarding the likely outcome of a case is not something that most attorneys take lightly given the potential importance of the evaluation to the client. Accordingly, attorneys can limit their risks by giving each issue in a case its due consideration and by specifically explaining the basis for the evaluation and any contingencies that may impact the outcome.