The test for determining when a cause of action for attorney malpractice arises is "when the existence of redressable harm has been established." Diaz v. Piquette, 496 So.2d 239, 240 (Fla. 3d DCA 1986), review denied, 506 So.2d 1042 (Fla. 1987). Unfortunately, there is no bright line test under Florida law to determine when the existence of redressable harm has been established. There are certain circumstances when malpractice is obvious and the existence of redressable harm is established upon completion of or omission or a particular act. For example, when an attorney fails to request certain provisions in a contract, or fails to consummate settlement of a lawsuit, or fails to file the claim within the preferred statute of limitations, the malpractice is obvious and redressable harm is established.
Less clear is the situation where the alleged malpractice occurs in the course of litigation, as a result of the court's entry of an order or ruling on a legal issue, including discovery matters. In such situations, under Florida law, "a cause of action for legal malpractice does not accrue until the underlying proceeding has been completed on appellate review, because until that time, one cannot determine if there was any actionable error by the attorney." Peat, Marwick, Mitchell & Co. v. Lane, 565 So.2d 1323, 1325 (Fla. 1990).
The rationale behind this principle is that, in most circumstances, until all appeals have been exhausted, it is impossible to determine if the loss was as a result of legal malpractice or simply judicial error. See PIGA v. Sikes, 590 So.2d 1051 (Fla. 3d DCA 1991).
In PIGA, the underlying case involved a wrongful death case in which PIGA retained counsel to defend its insured. The defendant's answer failed to deny the allegations of negligence, but did assert comparative negligence as an affirmative defense. At the beginning of the trial the plaintiffs moved to proceed solely on the issue of damages on the basis that the affirmative defense of comparative negligence was insufficient to deny liability. The defense argued liability had been contested throughout discovery and had been asserted by way of affirmative defense. The trial court granted plaintiff's motion and denied the defendant's motion to amend the answer. The jury returned a verdict in the amount of $253,000.00.
Before the appeal was perfected, and against counsel's recommendation, PIGA settled the case. In PIGA's subsequent legal malpractice action against its attorney, the court held PIGA had abandoned its malpractice action by abandoning its appeal.
To some, the issue of abandonment may seem harsh in that the potential legal malpractice plaintiff also has a duty to mitigate damages. However, the principle of abandonment is consistent with the goals of judicial economy and the general policy of discouraging premature and possibly useless See Diaz, 496 So.2d at 240.
Thus when facing a potential legal malpractice cause of action, both plaintiffs and defendants should carefully analyze whether the alleged negligent act or ommission should be reviewed by an appellate court, prior to entering into any compromise or settlement in the underlying case.