Co-counsel may not sue each other for lost prospective fees

By Joel E. Wright

No duties exist between co-counsel that would allow recovery for lost prospective fees, the Washington Supreme Court has held in a case of first impression. Rather, “[a]s co-counsel, both attorneys owe an undivided duty of loyalty to the client. The decisions about how to pursue a case must be based on the client’s best interests, not the attorneys’.”

Lee Smart attorney Alison H. Grennan and I defended a legal-malpractice action, Mazon v. Krafchick, no. 77398-0 (Oct. 19, 2006). The plaintiff, attorney Mazon, alleged that Krafchick, his former co-counsel in a personal-injury action, was liable to him for the loss of their client’s personal-injury claim because the statute of limitations had run. The attorneys’ insurance company paid a settlement to the ex-client, who alleged malpractice for the loss of the claim.

Then Mazon sued Krafchick on many theories, including breach of joint-venture agreement, breach of fiduciary duty, professional negligence, indemnity, and contribution. Mazon contended that Krafchick was liable for the amount of his “lost prospective contingency fee,” which he calculated based on the amount of the settlement with the ex-client. Mazon also alleged that the collateral-source rule required Krafchick to reimburse him for the amount that his insurance company paid on Mazon's behalf to settle the clients’ malpractice claim.