Two professional liability insurers have thrown their weight behind global law firm Dentons, as it fights a high-profile malpractice verdict and loss on appeal that raises concerns for Swiss Vereins.
The Attorneys’ Liability Assurance Society (ALAS) and the Ohio Bar Liability Insurance Co. (OBLIC) have both submitted amicus briefs in support of Dentons’ petition as it asks for the Ohio Supreme Court to review an intermediate appellate court’s April decision against the firm in RevoLaze v. Dentons US LLP.
Dentons, which after a jury verdict is on the hook for a $32 million award, characterizes its loss in front of a three-judge panel as having “far-reaching consequences for all law firms, large and small,” if the decision is upheld.
At the heart of the matter are claims from plaintiff RevoLaze that Dentons should not have taken on a representation in a patent infringement case because Dentons’ Canadian firm represented RevoLaze’s adversary—Gap Inc.—in other matters. In February 2020, a Cuyahoga County, Ohio, jury sided with RevoLaze and awarded $32.3 million in damages against the firm.
“If a client’s written consent is meaningless, then every lawyer and every law firm are threatened by this ruling,” said Joe Andrew, global chairman of Dentons, in a statement.
On appeal, the three-judge panel in Ohio’s Eighth District Court of Appeals upheld the jury verdict, going to great lengths to explain how it saw Dentons’ verein structure as having an impact on its conflicts system.
Dentons had argued that because of the way it is structured—using a network of Swiss vereins—operations in different markets did not need to run conflict checks with operations in other markets.
“This has been wrongly characterized as a case about organizational structure, when it is about both the ability and necessity of any firm to rely on client consent and the standards that are applied in an alleged malpractice case,” said Andrew. “It has nothing to do with vereins, partnerships, professional corporations or single practitioners, but effects them all.”
In its request for a review of the appeal decision, filed June 10, Dentons claims the court has made it too easy for plaintiffs to sue their law firms for malpractice. It claims “guardrails” are needed for the standards of both evidence and damages.
In their separate amici briefs, the OBLIC and ALAS also concentrate on the standards for proving legal malpractice, intimating the legal issues in question have nothing to do with the verein model.
“A malpractice plaintiff whose own choices cause it to lose or abandon the underlying case cannot establish proximate causation,” the OBLIC brief states, among other assertions, requesting the court to exercise its discretionary jurisdiction to hear the appeal and to reverse the judgment. The insurer, owned by the Ohio State Bar Association, provides coverage to thousands of lawyers in the state, primarily from solo to midsized firms.
ALAS, a member-owned mutual insurance association that provides coverage to 220 firms, including 87 members of the Am Law 200, warned that the Eighth District Court of Appeals ruling “represents an extreme departure from the rules by which trials of legal malpractice claims governed by the case-within a case doctrine are conducted in virtually every, if not every, other state in the country.”
Robin Weaver, head of claims for OBLIC, said the appellate court’s decision opens the door for more malpractice suits with less cause.
“The verein issue is a red herring,” said Weaver. “This decision essentially invites parties to find some fault with their counsel.”
And it’s not only global giants that should be alarmed, according to Andrew.
“That both ALAS and OBLIC, which together represent tens of thousands of lawyers and law firms in Ohio and across the country, felt compelled to file briefs in support of Dentons’ petition, is the clearest indication that this case is not about vereins, but impacts all law firms, regardless of structure,” said Andrew.
Lawyers for ALAS did not immediately respond to requests for comment.