Illinois Appellate Court Holds That Defendant's Solvency is Required Element of Plaintiff's Legal Malpractice Action
To plead a cause of action for legal malpractice, a plaintiff must allege facts that support a finding that (1) an attorney owed the plaintiff at duty arising from the attorney-client relationship, (2) the attorney breached that duty, and (3) the attorney's breach proximately caused the plaintiff to sustain damages. Now, The Illinois Appellate Court recently held that the element of solvency is required in a legal malpractice action, as well. This means when a malpractice plaintiff seeks to recover for loss of a cause of action, he must adequately allege and later prove that the defendant in the underlying lawsuit would have had sufficient funds to compensate him had the attorney's negligence not come into play and the plaintiff prevailed. The Appellate Court elaborated, stating the plaintiff need only show that the underlying defendant would have been capable of paying some of the damages at some point between the attorney's malpractice and the end date of the judgment's enforceability. See, Visvardis v. Ferleger, PC (1st Dist. 2007).
In my opinion, the Visvardis case is very important for anyone confronting a situation where the defendant lawyer's conduct may well have caused the plaintiff's case from being otherwise uncollectible.
In Visvardis, the First District Appellate Court explicitly published this opinion “to criticize and clarify the rule in Illinois requiring plaintiffs in a legal malpractice cases to plead the solvency of the underlying defendants.” See 873 N.E.2d at 439. The Appellate Court struggled with the injustice of forcing plaintiffs to prove solvency -- i.e. that “but for” the attorney’s negligence the plaintiff would not have suffered damages. Indeed, the Court noted the unfairness of imposing the burden of proving solvency on the plaintiff, who may have lost evidence of solvency due to the attorney’s negligence. Because proof of uncollectability allows the negligent attorney to avoid compensating the plaintiff for the negligence, the attorney should bear the risk of uncertainty of proof concerning collectibility. See id. (citations omitted).
Faced with the injustice of placing the burden on the plaintiff when the attorney caused the uncollectibility, the Appellate Court clarified the rule of showing solvency as follows:
Illinois apparently continues to require legal malpractice defendants to plead and prove the solvency of the underlying defendants. . . . Instead the plaintiff must plead facts supporting an inference that after the date of the malpractice, and some time before judgment against the underlying defendant would be unenforceable due to its age, the underlying defendant would have some funds available for payment of some part of the damages.
See id. at 443.
The Appellate Court is changing the landscape -- to combat the essential unfairness of allowing an attorney to escape liability because of insolvency -- by requiring the plaintiff only to show that the underlying defendant would have been capable of paying some of the damages at some point between the attorney’s malpractice and the end date of the judgment enforceability.
I have a case in which this very issue may be worth hundreds of thousands of dollars. Does anyone know of any cases on the same issue from countries with English common law systems?