ASKED & ANSWERED: Brian Einhorn on statue of repose

By Steve Thorpe

Legal News

A newly enacted statute of repose, signed into law Jan. 2, allows legal malpractice plaintiffs in Michigan only six years after the date of the alleged malpractice to bring suit, regardless of when it was discovered. Brian Einhorn is a partner at Collins, Einhorn, Farrell, & Ulanoff PC in Southfield and is an expert on legal issues affecting lawyers, judges and courts. He has litigated cases and disciplinary proceedings involving issues ranging from lawyers' potential liability to clients for defamation, to judicial candidates' free speech rights and has also defended many district and circuit courts throughout the state. Einhorn is president-elect of the State Bar of Michigan.

Thorpe: What are the primary issues this new law addresses?

Einhorn: MCL 600.5836(1) is a statute of repose for claims against lawyers. It precludes the filing of a legal malpractice case six years after the date of the act or omission by the lawyer. To place this in context, assume that a lawyer fails to properly file a Qualified Divorce Relations Order ("QDRO") which compromises the client's pension rights. Assume further that the former client would not have discovered that fact until after her former husband retired. Finally, assume that the husband retires seven years after the divorce was finalized. Prior to the legislature, adding 5838(b), the former client would have had six months from the date she discovered the lawyer's mistake to file a malpractice claim against her now former lawyer. The amendment now precludes the client from filing a lawsuit.

The statute of repose will be particularly beneficial to transactional and real estate lawyers, probate and trust attorneys and the occasional family law practitioner. This group of lawyers is occasionally sued long after they have prepared documents or trusts and wills. Claimants have been known to file a claim as many as 20 year after the trust or other documents were prepared alleging that they could not have known of the malpractice: that until they had to pay a tax or discovered they could not get the relief they thought they were getting by a contract they did not know their lawyer had messed up.

Thorpe: Other professions like medicine and architecture have had similar protections in Michigan for quite a while. Why did it take so long for attorneys?

Einhorn: I am not aware of the legislature previously being asked to consider a statute of repose for lawyers. But certainly, without a period of repose, attorneys have remained at risk for malpractice actions well into retirement. As such, lawyers have complained that they continue to incur expenses into retirement to maintain insurance to protect themselves from malpractice claims that arose from work they had performed before they retired. Statutes of repose recognize that as time goes on memories fade, evidence of records are lost or destroyed, and witnesses are deceased or disabled. Probate and estate planning lawyers have been particularly frustrated when they get sued 10-15 years after they prepared a document and sometimes long after the people who would have been able to talk about the intent of the document are no longer able to testify. The Probate and Estate Planning Section of the State Bar of Michigan proposed the legislation. The Family Law Section of the State Bar of Michigan supported the bill. Only the Michigan Association of Justice opposed the bill as they typically oppose legislation that would limit the right of people to bring claims.

Thorpe: The language of the law specifies "legal malpractice against an attorney-at-law or a law firm." Why both?

Einhorn: If the law only referenced a "law firm," a former client, instead of suing the law firm, would sue the attorneys at the law firm. Conversely, if the law only specified attorneys at law, the former client would sue the attorney's law firm and not the attorney. The language is an example of good draftsmanship.

Thorpe: The law includes an alternative "discovery" rule. Tell us about that.

Einhorn: The amendment to the statute does not provide for an alternative "discovery rule." As noted previously, the law had been that a former client could sue their lawyer within two years from the date the lawyer discontinued serving the client as to matter out of which the claim for malpractice arose. Before the statue was amended, a client would also have the right to sue his former lawyer within six months after the client discovered, or should have discovered, the existence of a claim. Using for example, the improperly filed QDRO, the former client could sue within six months after discovering the existence of the claim. The "discovery" rule provided a former client with the right to sue their former lawyer even if they first discovered the claim 15-20 years after the lawyer supposedly committed malpractice, if that former client could show that he or she could not have previously discovered the lawyer's supposed error. The amendment precludes a legal malpractice case against an attorney or law firm if it is not filed within six years after the date of the act or omission that serves as the basis of the claim. Again, using the supposedly mishandled QDRO, if a client learns of it five years after the lawyer ceased providing representation, that client would have six months to file their claim. But if the client learned about the failed QDRO six years and one day after the lawyer ceased providing representation, that client will not be able to file a claim against his former lawyer. The statute of repose does not extend the time that a legal malpractice claim can be filed. Most legal malpractice cases are going to have to be filed within two years from the date that the lawyer discontinues his or her representation. But the discovery rule will be helpful for those clients who supposedly discover the error after the two year statute would have otherwise expired, providing they can prove that they could not have discovered the malpractice before the statute expired, and providing further that their discovery occurred within six years from the conclusion of the representation. After six years, the former client will not be able to file a claim against his former lawyer.

Thorpe: Do you think there may be more action from the legislature on this front?

Einhorn: The present legislature seems to favor businesses and groups that want to limit or reduce claims. In the last several years, the legislature has proposed limits on lawsuits against bowling alley proprietors, farmers markets, horse barns and others. I would, therefore, not be surprised to learn that the legislature is also considered legislation that would further limit other types of claims. I do not, at present, envision there being any other legislation that would further limit the abilities of persons to bring claims against lawyers.

Published: Tue, Feb 5, 2013