Legal Malpractice within Legal Malpractice (Or Twice Screwed)
[Post updated January 2020. Ed. Note. Although this post is still relevant and current, newer information on legal malpractice can now be found on our sister legal malpractice website, US Legal Malpractice.]
Talk about bad luck. Jackie Young claims her first lawyers botched her case and then the malpractice lawyers Jackie hired to sue her first lawyers botched the malpractice case. She sued them too!
Jackie’s first lawyers settled an employment discrimination suit against Bell South for $5000 in 1997. Twelve years later Jackie would recover millions of dollars – against her lawyers for mishandling her case.
We generally blog to share important legal developments and helpful tips with our clients and the community. Today’s blog is a tragic story but with a happy ending. The material for today’s blog is courtesy of Michael Fox.
Clients rely on the advice of their lawyer when considering whether to settle or bring a case. “What is my case worth?” is a question we hear daily. There are no magic answers to that question. Sometimes lawyers have to tell clients that they have no case whatsoever. Lawyers are expected to use their experience and best judgment to honestly advise their clients. The key word is “honestly.”
Jackie’s first lawyers apparently failed the honesty test. Miserably. According to Fox, her lawyers from Ruden McCloskey failed to disclose that although they settled her case for $5000, they entered in a four year consulting agreement worth $480,000 with Bell South. Plus they agreed not to file more cases against Bell South.
See a conflict here? Sell out your client for a mere $5000 while collecting 100 times that amount from the very defendant who injured your client. That case ended in a multi-million dollar legal malpractice verdict against her first lawyers in 2002. But the story doesn’t end there.
Jackie’s new lawyers, Becker & Poliakoff, sued Bell South because Jackie felt she was the victim of continued discrimination. Unlike the first lawyers who failed to disclose a conflict of interest, Becker & Poliakoff apparently missed a filing deadline and the new suit was dismissed. Jackie claims that Becker & Poliakoff then concealed the dismissal for a year.
Jackie next sued Becker & Poliakoff for their malpractice – missing a court deadline and allowing her case to be dismissed.
Jackie just won a $4.9 million dollar against her lawyers in her second legal malpractice case.
I have never heard of such facts before but justice usually prevails – IF you seek competent counsel and pursue dishonest or negligent lawyers for their mistakes.
Thankfully, most lawyers are honest. They do not cover up mistakes and they don’t attempt to sell out their clients to the highest bidder. Unfortunately, there are some dishonest lawyers out there. More often, malpractice actions simply involve a lawyer who made a costly mistake. Whether by fraud or neglect or dishonesty, if the lawyers’ actions hurt the client, potential legal malpractice exists.
The other lesson in this story is to make sure that you always hire the right lawyer for the job. No lawyer can do everything. Make sure your lawyer concentrates on or has experience with your type of case.
The lawyers at MahanyLaw primarily concentrate in whistleblower law, fraud recovery and legal malpractice.
If you think you may have been hurt by the actions of a dishonest or negligent lawyer, call us immediately for a free consultation. We consider cases nationwide. We can be reached online, by email or by phone 202-800-9791.
Update: Many lawyers make mistakes. They happen. And that is why lawyers often have malpractice insurance. We typically follow up our stories simply because we are curious about the lawyers. In the case of Becker & Poliakoff, they are apparently in trouble again.
Bernie Madoff investors sued Becker & Poliakoff and a second law firm, Chaitman LLP claiming that attorney Helen David Chaitman improperly represented clients with conflicting interests while at the two firms.
According to the complaint,
“On or about December 11, 2008, when Bernie Madoff was arrested, thousands of people learned that they had fallen victim to the largest Ponzi scheme in American history. Many had lost their life savings and were desperate to find someone to help them recover.
“Although many lawyers offered their services, Helen Chaitman stood apart from the rest because she vowed to stand up to Irving Picard, who was responsible for clawing back funds received by “net winners” and distributing those funds to “net losers.”
“Chaitman’s self-promotion as a savior for other Madoff victims paid off. Within a short amount of time, she had signed up hundreds of clients who agreed to pay her hourly fees to defend them against Mr. Picard’s clawback lawsuits.
“Chaitman’s clients, however, had been swindled twice. First by Madoff, and again by Chaitman.
“Chaitman’s greed caused her to violate the first rule of professional ethics: an attorney cannot simultaneously represent clients with directly adverse interests. Chaitman represented both net winners and net losers in a zero-sum game; the more money collected from some of her clients (the net winners), the more available to be distributed to her other clients (the net losers). Chaitman’s clients, therefore, were in direct conflict with each other.
“To make matters worse, Chaitman herself is a net loser, which means she personally stands to receive money taken from her net winner clients. This conflict cannot be waived.”
The complaint says Helen Chaitman was a net loser because she herself was a victim of the Madoff fraud. That is what made her so attractive to other Madoff victims. They thought she would be more sympathetic to their claims and hardships.
Becker & Poliakoff are named because Ms. Chaitman worked there for several years before forming her own firm.
After being sued, Chaitman’s firm, Chaitman LLP, countersued her own clients. According to her lawsuit, “The Amended Complaint is manufactured by class counsel so that certain members of class counsel’s family can avoid paying their legal bills to Defendant. It is based upon facts which Plaintiffs know, or should know, are false.”
Both Chaitman LLP and Chaitman;s former employer, Becker & Poliakoff both asked the court to dismiss the lawsuit against them. In 2019, both a federal magistrate and U.S. District Court Judge refused to dismiss the lawsuit brought by the clients.
As of January 2020, the complaints are proceeding. The Chaitman firm sued two additional lawyers.
The real tragedy of this case is that both the clients and attorney Helen Davis Chaitman are victims of Bernie Madoff. And now they are fighting each other for scraps. We will carefully follow this case.
If you are the victim of a Ponzi scheme, we may be able to help you recover your money. We sue stockbrokers, lawyer and banks who may have facilitated the scheme. For more information, contact us online, by email or by phone 202-800-9791. All inquiries are kept confidential.
*Brian Mahany’s first boss was Ms. Chaitman. We are not involved in this case and have no stake in its outcome. We hope that all victims of Bernie Madoff are made whole and have brought several successful actions on behalf of Madoff victims.