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• W348275145 abstract "In recent years, defense attorneys have seen growing attempts to assign professional negligence claims. These assignments raise serious questions of public policy. On one hand, plaintiffs argue that assignment of claims often provides prompt relief for injured parties and encourages settlements. On other hand, defense lawyers argue that courts should not permit a professional negligence cause of action to be converted into a mere commodity. In analyzing assignability issue, one should distinguish between close and confidential relationships (such as attorney-client relationship) and other less intimate relationships (such as relationship between an insurance agent and an insured). In legal malpractice context, many courts disfavor assignments. (31) Courts view assignability of a legal malpractice claim with a skeptical eye because it is predicated on uniquely personal nature of legal services and contract out of which a highly personal and confidential attorney-client relationship arises, and public policy considerations based thereon. (32) Courts have justly feared that such an assignment could relegate legal malpractice action to marketplace and convert it to a commodity to be exploited and transferred to economic bidders who have never had a professional relationship with attorney. (33) Such factoring of malpractice claims could encourage unjustified lawsuits against members of legal profession, generate an increase in legal malpractice litigation, promote champerty and force attorneys to defend themselves against strangers. (34) While an attorney-client relationship is indeed special, defense lawyers should take note of trend in other professional negligence contexts of permitting assignability. More liberal assignment rules will have repercussions for attorneys as well as other professionals. However, even in jurisdictions where assignment is favored, there remain tools to defeat assignment--most especially, existence of collusion. An example of growing trend in permitting assignments is Fowler v. Hunter. (35) The Fowlers were seriously injured when their motorcycle was struck by Sallie Hunter's car. The car was owned by Gynecologic Oncology Associates (GOA), a practice with which her husband was affiliated. Auto-Owners Insurance Company insured vehicle with limits of $1 million. GOA also had a commercial umbrella policy for $4 million procured through Insurance Associates and issued by Selective Insurance Company (Selective). After Fowlers filed suit against Mrs. Hunter, it was discovered that because of an inadvertent computer error, umbrella policy did not provide automobile liability coverage. The Fowlers filed a declaratory judgment action to determine what coverage was available. The Hunters and GOA filed cross-claims against Selective for reformation and against Insurance Associates for professional negligence. A settlement was reached whereby Hunters and GOA assigned their professional negligence claim against Insurance Associates to Fowlers. The Fowlers signed a covenant not to execute against Hunters and GOA. The Hunters and GOA also agreed to cooperate with Fowlers in prosecution of professional negligence claim. In event of a recovery on professional negligence claim, Fowlers and Selective agreed to split equally any recovery from professional negligence action. The state trial court granted summary judgment to Insurance Associates. The trial court reasoned that because Hunters and GOA were insulated from execution of any judgment, Fowlers could never prove damages flowing from negligence of Insurance Associates. The Fowlers appealed this ruling. The South Carolina Court of Appeals found that trial court's analysis was technically correct. (36) However, court went on to observe that the majority of courts having addressed this issue have elected to allow such an assigned claim to proceed. …" @default.
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• W348275145 modified "2023-09-24" @default.
• W348275145 title "Assignability of Professional Negligence Claims: Look for Collusion" @default.
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