Attorney-client relationship key for legal malpractice lawsuits

A Michigan law firm is facing charges of legal malpractice in relation to advice provided to a private investment firm, SSL Assets.

In 2012, SSL wanted to buy a distressed company that participated in a multiemployer pension plan. The pension was underfunded by $3.9 million at the time of purchase. Two executives from SSL sought advice from the law firm to see whether they would be liable for the underfunded pension.

They were advised that they faced no direct exposure for the $3.9 million in liabilities. In reality, SSL was responsible for those liabilities under ERISA regulations.

SSL is suing the law firm for legal malpractice and breach of contract.

When is an attorney-client relationship established?

One of the key issues surrounding this case is whether SSL ever established an attorney-client relationship with the law firm. If there is no attorney-client relationship, then there usually can't be a case of legal malpractice.

A District Judge ruled that there was an attorney-client relationship established with the two executives. This ruling is in spite of the fact that there was no written agreement outlining the terms of the relationship. Because the executives were seeking legal advice about the liability, the judge ruled that was enough to establish the attorney-client relationship.

However, the judge couldn't determine whether the law firm was representing SSL as a whole or if they were only representing the two executives. As a result, the case is slated to go to trial.

An attorney-client relationship isn't the only issue when determining whether legal malpractice occurred in Florida. You must also demonstrate that the lawyer was negligent in their legal duty and that the damages caused were the result of the lawyer's negligence. If these criteria are met, there may be a case for legal malpractice.

It's an interesting case, and it's one we'll continue to monitor as it makes its way to trial.

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