Attorney Ethics May Result in Attorney Liability to Clients and Third Parties in New York.

As much as the law changes, it stays the same. Oliver Wendell Holmes, an original legal theorist, revolutionized the understanding of law when he reconceived common law as a theory of social inquiry. Arguing that the law was, in fact, a social reconstruction of ever-changing historical contexts, we are more aware of the interlinked effect of evolution and revolution on legal developments. Whereas in the old days, quill and ink were novel, today, intangible computer files are subject to conversion analysis and e-mails are increasingly accepted in contract and communications law.

One statute, however, has outlasted fleeting technologies and changing socioeconomic conditions through resurrection. A recent decision by the Court of Appeals [Shmueli v. NRT N.Y. Inc., 68 AD3d 479 (2009)] has breathed new life into New York State legal malpractice law and draws from a law which is more than 700 years old. A near facsimile translation of the oldest statute in Ango-American jurisprudence, Judiciary Law 487, prohibits New York attorneys from engaging in practices that deceives any party or any court in any pending proceeding. The statute guarantees that lawyers remain ethically conscious while performing their professional responsibilities and reinforces the personal accountability for their actions both inside and outside the courtroom. While time will tell, the New York State Judiciary Law 487 is designed to deter abusive litigation tactics and misuse of client funds in connection with litigation with the threat of criminal misdemeanor and potential treble (read triple) damages to the injured party in a civil action. Whereas a legal malpractice claim may be based upon negligence, a claim under Judiciary Law 487 must plead that a defendant had an intent to deceive.

Furthermore, the Third Dep’t ruled in Amalfitano v. Rosenberg, 12 NY3d (2009), that treble damages may be sought whether or not a court believes there was, in fact, a material misrepresentation of fact because the costs of plaintiff’s legal representation may be a proximate result of that material misrepresentation. That is, in the absence of a material misrepresentation of fact, the court reasons that no claim nor legal expenses would have resulted. The ruling in Amalifitano eliminates monetary concerns that may have deterred potential opposing parties and as a consequence, there will likely be a considerable increase in claims under Judiciary Law 487.

Bottom Line– clients and third parties mishandled by deceptive tactics have a newly invigorated, but long established tool to review deceit in New York.