A wrongful death lawsuit is filed by the surviving relatives of a person killed by the negligence or intentional action of another. Although a wrongful death lawsuit can be filed in personal injury cases such as automobile accidents, the theory often is associated with products liability cases, discussed below. Survivors include the decedent's spouse, children, and parents. In a wrongful death action, damages may be awarded for the decedent's future income that was lost when he or she died. The surviving spouse may recover damages for pain and suffering, grief, mental anguish, and loss of companionship, under some circumstances. The estate of the decedent may sue to collect money needed to pay for medical treatment received by the decedent before his or her death. Texas does not recognize a cause of action for the wrongful death of a viable fetus, that is, a fetus capable of surviving outside the mother's womb.

Premises liability is an area of tort law that governs the duties owed by landowners to persons on their property. Generally speaking, a landowner is liable for anyone injured on the landowner's property and a jury can award damages to the injured person. However, a landowner may not be liable if he or she had no way of knowing about a hazard that caused an accident. No one is responsible if an accident truly was unavoidable. In general, a landowner is not liable for injuries to a trespasser, unless the landowner is guilty of intentional conduct or gross negligence. A landowner must take reasonable care to protect persons who are likely to approach a property for legitimate purposes, such as letter carriers or delivery persons. Anyone, even a trespasser, can sue a landowner if he or she is injured by an unjustified hazard on the property, such as a trap designed intentionally to injure people.

Special rules apply to protect children from getting hurt on someone's property. Texas recognizes the "attractive nuisance" theory, which is contrary to the general rule that landowners are not liable to trespassers. A landowner may be liable under the doctrine of attractive nuisance to a trespasser who is injured on the owner's property under certain conditions. The trespasser must be a child "of tender years." Under this rule, a child does not have sufficient capacity, discretion, or intelligence to distinguish danger, as does an adult. An attractive nuisance is a thing that may naturally be expected to lure young children onto private premises, such as a swimming pool. A landowner will be liable to an injured child trespassing on the owner's property if the following conditions are satisfied: (1) the place where the attractive nuisance was maintained was one that the owner knew or should have known that small children would be likely to frequent and to play, (2) the condition was one that the owner knew or should have known involved an unreasonable risk of death or serious injury to such children, (3) the particular child, because of his or her tender years, did not realize the risk involved in going into the place, and (4) the utility to the owner of maintaining the danger was slight as compared to the probability of injury.

If someone is injured on public land adjacent to a landlord's property, the landlord generally is not legally liable unless he or she did something to cause the injury, such as cutting down branches on the landowner's property and allowing them to fall and injure a passerby.

Business owners always can be sued if their own carelessness or negligence causes others to be injured. Historically, this meant landowners were not liable for the actions of third parties they did not control. However, today business owners sometimes are liable for injuries caused by third parties committing crimes on their property. An increasing number of crime victims are winning lawsuits filed against business owners who did not, in a jury's opinion, take appropriate measures to ensure the safety of their customers. This type of lawsuit extends the landowner's duty to foresee, and take steps to prevent, possible illegal activity on his or her property. An example of this type of case is one in which a person who is attacked in a parking lot sues the lot's owner for failing to provide security measures that might have prevented the attack.

Whether a lawsuit based on premises liability will succeed largely depends on a jury's opinion of whether a reasonable business owner would have foreseen the probability of the crime occurring. For example, if tenants of an apartment building complain several times to their landlord that their security system is not working, and burglars later break into several apartments, the tenants might have grounds for a successful lawsuit against their landlord for negligently failing to fix the security system.

A common kind of personal injury lawsuit is one that results from an injury caused by a defective product. Products liability lawsuits require the plaintiff to prove that a product was defective and that the defect was the principal cause of the plaintiff's injury. Businesses that manufacture or distribute products should be aware of how products liability may arise.

In Texas, a products liability plaintiff also can collect damages from a company that distributes or sells defective products, even if the company did not design, test, or manufacture the product. The retailer or distributor then has the right to indemnity from the manufacturer of the defective product if the retailer or distributor is not independently culpable. In addition, a distributor who damages a product can be held liable for any injuries caused by the damage, and a retailer who incorrectly assembles or installs a product also can be sued.

Products liability plaintiffs allege strict liability or negligence. Under strict liability, a manufacturer is liable for injuries sustained by a person using its product if the product is found to be unreasonably dangerous. Under Texas law, a plaintiff pursuing a claim for strict liability must prove that a product was defective and unreasonably dangerous, that the defect was present while the product was still in the manufacturer's control, and that the defect was the cause of the injury. The focus is not on the manufacturer's conduct, but on whether the product was defective. The statute of limitations for products liability lawsuits based on strict liability is two years from the date of injury.

In a products liability lawsuit based in negligence, the plaintiff alleges that the manufacturer failed to exercise the care that would be exercised by a reasonable manufacturer in the same or similar situation. While strict liability focuses on the manufactured product, negligence theory focuses on the conduct of the manufacturer. A manufacturer who implements very strict production controls designed to ensure that products are made properly may be able to avoid committing negligence by taking all due care that reasonably could be expected. The statute of limitations for products liability lawsuits based in negligence is two years from the date of injury.

Products liability lawsuits typically allege one or more of three kinds of defects--defective warning, design defect, or manufacturing defect. Often, a plaintiff will allege all three theories in a single lawsuit.

Defective Warning

A manufacturer has a duty to provide adequate instructions for the safe use of its product and must warn buyers of any dangers associated with the product. If such warnings are not present, the manufacturer may be liable for injuries caused by the product. Manufacturers have a duty to perform safety tests to determine what warning labels need to be put on a product. These tests should simulate conditions under which the product ordinarily will be used. For example, the manufacturer of a hand-held electric hair dryer must anticipate that its product might be used above a sink full of water, and therefore must warn buyers that dropping the product in water may lead to electrocution. However, a warning label need not be put on an obviously dangerous product, such as a kitchen knife.

Manufacturers may have a duty to provide post-sale information as part of the duty to warn. Under Texas law, manufacturers who have retained or regained a significant degree of control over a product may be held liable for failing to warn about hazards discovered after a product has been sold, or for failing to recall a product in which defects have been discovered. In other words, a manufacturer may have to warn consumers about -- or even recall -- an unsafe product, even if the manufacturer stopped making it many years ago.

Design Defect

In most products liability cases, the plaintiff attempts to prove that a design defect caused an injury. Sometimes products are built exactly as designed, but are dangerous because of poor engineering, inadequate testing, or poor choice of construction materials. A manufacturer is negligent if it fails to take reasonable care to ensure that a product is designed to perform safely. For example, the design of the ill-fated Ford Pinto resulted in an increased risk of fire in a collision. Companies must make sure their products are safe when they are used in the intended way, as well as in unintended, but foreseeable, ways. If a manufacturer cannot eliminate a danger from a product, or install a guard to protect a user from the danger, then the manufacturer must warn the user of the danger.

Manufacturing Defect

A manufacturing defect occurs when a product is designed well but, because of a flaw in the manufacturing process, it fails to meet the specifications contained in the design. For example, a motorcycle manufacturer may design a gasoline tank for its motorcycles that exceeds all safety standards, but it contracts the production of the tanks to a company that uses substandard hardware. If a leaking gas tank causes a fire, then the manufacturer could be liable for injuries caused by the manufacturing defect.

Though accidents can occur virtually anywhere and under any circumstances, some of the most serious and costly accidents occur while people are involved in transportation-related activities. Business that incur liability in transportation-related activities face additional issues, such as insurance coverage and application of specific laws governing this area. Retaining an inexperienced lawyer may result in a defendant incurring substantial liability or even losing a lawsuit. It is important that a business faced with defending such a lawsuit choose an attorney with experience and familiarity in the particular area of defense.

Automobile Insurance and Reporting Issues

Like any state, Texas has its share of serious automobile accidents. Recognizing that accidents can be costly, Texas requires that every owner and operator of a motor vehicle establish financial responsibility for their vehicles.

In general, this is accomplished through the purchase of motor vehicle liability insurance. The minimum insurance that may be purchased under Texas law is $20,000 for bodily injury or death of one person in an accident, $40,000 for bodily injury or death of two or more persons in one accident, and $15,000 for property damage. Insurance companies must provide coverage with the same policy limits for their insureds to protect them against uninsured or underinsured motorists. Maximum deductibles of $250, $500, and $250, respectively, are allowed for such insurance coverage. Failure to obtain and maintain such insurance coverage (or other proof of financial responsibility, such as a surety bond or self-insurance) can result in revocation of a driver's license and car registration, a fine, and/or imprisonment. Purchasing motor vehicle insurance does not prevent a person at fault in an accident from being sued.

In Texas, drivers are required by law to exhibit their drivers' licenses to each other after an accident. Further, an accident report is required to be filed with the Department of Public Safety within ten days from the date of the accident if the accident was not investigated by a law enforcement officer and if there was an injury or death, or if total damages exceeded $500. Official accident report forms are available from a police station, sheriff's department, highway patrol office, or the Texas Department of Public Safety. Finally, anyone involved in an accident must inform his or her insurance company promptly. Failure to do so may void an insurance policy. Evidence of insurance must be carried in the vehicle and furnished to a law enforcement officer or another person involved in an accident.

Maritime and Railroad Personal Injury

Owners and employers of boats, ships, railroads, rail yards, and even off-shore oil sites face particular liability issues when defending personal injury lawsuits, because maritime issues and railroad issues are governed by particular laws. When choosing an attorney regarding a maritime or railroad matter, it is very important to choose someone experienced in that area. The law governing maritime issues, for example, is a complicated jumble of federal statutes, United States Supreme Court decisions, and centuries-old common law. A general practitioner unfamiliar with the dips and turns of maritime law may have difficulty properly representing a client.

By law, railroad carriers have a duty to maintain the reasonable safety of their tracks, particularly around railroad crossings, and can be held liable if an accident occurs where there are defective or insufficient numbers of warning lights and signs. Additionally, railroad engineers and crews have a duty to keep a lookout for potential problems and to sound the train's blowhorn when approaching potentially dangerous areas. Persons crossing or near railroad tracks also have a duty to act reasonably. Texas recognizes the doctrine of comparative responsibility. If a person is partially responsible for an accident, any damage award he or she receives can be reduced by the extent to which he or she was responsible.

A railroad employee who is hurt on the job is entitled to recover damages from his or her employer under the Federal Employer's Liability Act (FELA). FELA is similar to a workers' compensation program for railroad employees. FELA enables railroad employees to recover for any injury "resulting in whole or in part from the negligence of any of the officers, agents, or employees of [the railroad], or by reason of any defect or insufficiency, due to its negligence, in its cars, engines, appliances, machinery, tracks, roadbeds, works, boats, wharves or other equipment." Recovery under FELA is the exclusive remedy for railroad employees injured on the job.

Aviation Accidents

While travel by commercial aircraft remains the safest way to travel long distance, accidents do happen, and the litigation that follows an airline crash is notoriously complicated. Lawyers defending aviation lawsuits must consider a number of issues. For example, he or she must determine whether federal or state law governs the action and tailor the defense accordingly. The attorney may have the option of removing the case brought in state court to federal court, resulting in the application of different procedural rules. An attorney may want to challenge the appropriateness of a class action lawsuit, and argue that the members of the class should be forced to bring their own suits. Another consideration faced by defendants is whether to bring in other potentially liable parties not named by the plaintiff. Possible defendants include the aircraft manufacturer, operator, or owner; the airport operator; corporate officers; and component part manufacturers. Of course, the attorney selected should be familiar with the defenses to the various theories of recovery a plaintiff may allege in an aviation lawsuit, which include strict liability, negligence, breach of warranty, and statutory provisions. It is obvious, therefore, that when choosing an attorney to represent defense interests after an airline accident, it is best to choose someone with experience in airline tort litigation.

Professional malpractice occurs whenever a professional improperly performs his or her duties intentionally or out of ignorance or carelessness. This section examines some of the issues involved in defending professional malpractice suits arising in the medical, legal, engineering, architecture, and accounting professions, most of which are based in negligence. It is important to note that professional negligence is only one way in which professionals can incur liability for their job-related actions. A doctor can be sued for breach of contract if he or she backs out of an agreement to work for a hospital. A nurse might be sued for assault and battery if he or she intentionally harms another person with an improper injection.

Medical malpractice suits based in negligence comprise the majority of professional malpractice lawsuits filed in this country. This is not to say that medical professionals are more prone to committing negligence, but that they are the target of more professional malpractice lawsuits. This is not surprising, given the gravity of the situations faced every day by the medical professional. The number of lawsuits against other professionals is increasing, and many of the concepts used in those lawsuits are adapted from the medical malpractice context.

Medical Malpractice

"Medical malpractice" does not apply only to medical doctors; other health care providers, such as psychologists, dentists, and nurses, also may be sued for medical malpractice. Under Texas law, a person establishes a basic case of medical malpractice by establishing four elements--duty owed to the patient, breach of the standard of care, causation, and damages to the patient. A party accused of medical malpractice defends itself either by showing that one of these elements is missing or by establishing an affirmative defense. An affirmative defense is a legal argument in which the defendant admits the existence of all required elements, but argues that his or her actions should be excused nonetheless.

Duty Toward the Patient

The first element in any medical malpractice lawsuit is that of a duty owed to the patient. If there is no legal duty to act, a medical professional can stand by doing nothing while a person suffers, and still not be negligent. Thus, the first question to address in a medical malpractice lawsuit is whether the medical professional owed any duty to the plaintiff. Often this question is easily answered. When a patient goes to a doctor with a problem and the doctor agrees to treat the patient, the doctor has assumed a duty to treat the patient. The doctor has indicated that he or she has the appropriate training and skill to adequately care for the patient and has assumed a duty toward the patient.

Cases in which the duty owed a patient is contested generally arise in the context of a doctor who did nothing toward the patient. Historically, in the American system of jurisprudence, a person had no affirmative duty to help others, absent some special relationship between the two parties. A doctor dining out at a restaurant had no general duty to help someone experiencing a heart attack. The doctor could continue his or her meal and do nothing to help the heart attack victim because the law imposed no duty to act in this circumstance. If, however, the person having the heart attack was the doctor's child, the law did impose a duty to act because of the parent-child relationship. Despite the apparent callousness of this rule, it remains the law in most states.

An important area of medical malpractice law receiving increased attention in the courts deals with the circumstances under which a doctor owes a duty to persons other than the patient. For example, a pedestrian injured when an automobile driver suffers an epileptic seizure while driving might charge that the driver's doctor violated a duty to the general public by failing to properly diagnose the driver's epileptic condition. The victim of a domestic assault might charge that the perpetrator's psychiatrist had a duty to warn the victim of the patient's unstable condition.

Breach of the Standard of Care

Medical negligence results if the doctor injures his or her patient by using less skill and care than a reasonably competent doctor would use in diagnosing or treating the same condition. In order to avoid liability for medical malpractice, a physician must--at a minimum--use the same level of care that any reasonably competent doctor would use under the same circumstances. In most cases, a plaintiff must present expert testimony on what the standard of care should have been. Medical malpractice lawsuits often become battles in which each side has expert witnesses declaring different levels of acceptable medical standards.

In practice, a doctor is not considered a reasonably competent doctor if he or she does not keep abreast of--and use--current, commonly accepted methods of treatments. However, if there is more than one commonly accepted method of treatment, a doctor is free to use whichever he or she chooses, as long as the method is accepted by a substantial number of physicians. Medical generalists are held to that standard of learning and skill possessed by such generalists in similar localities. The action of a medical specialist, however, is judged against the actions of members of the same specialty across the nation. A doctor who clearly disregards well-established medical standards or who attempts to perform medical procedures clearly beyond his or her capabilities is not using the same level of care that a reasonably competent physician would use. Anyone injured by such a careless doctor would almost certainly recover damages from the doctor in a medical malpractice lawsuit.

Causation and Damages

The third element of a medical malpractice lawsuit is causation. Causation frequently is divided into two separate inquiries--whether the professional's actions in fact caused the harm to the patient, and whether the professional's actions were the proximate cause of the patient's harm.

The "cause in fact" inquiry is usually answered with a "but for" test. That is, a doctor's action caused the patient's harm if, but for that action, the patient would not have been harmed.

The proximate cause inquiry asks, if the action did in fact cause the harm, whether the professional ought to be held responsible for his or her actions. In some rare instances, the physician's actions are so removed from the final harm to the patient that the law cuts off liability for those actions by saying that the tortious conduct was not proximate to the harm. In other words, there is not a close enough connection between the action and the harm to say there is proximate causation.

Sometimes this causation inquiry is answered rather easily--a doctor gives a patient the wrong drug and that drug causes permanent injury. Thorny issues arise when the harm to the patient had more than one cause. For example, two doctors, acting independently, might both prescribe the same wrong medication. If "but for" analysis is applied to each doctor's actions in isolation, it cannot be said that either doctor's actions were the cause of harm to the patient because the patient would have been harmed through the negligence of the other doctor. Different jurisdictions have created their own rules to deal with "multiple cause" injuries. Texas courts have dealt with this issue by holding that when there is more than one person whose conduct may have caused or contributed to an injury or death, proximate causation can be established by showing that a particular defendant's actions were a factor in causing the plaintiff's injury. In such an event, damages are awarded based on the percentages determined by the jury, as long as the plaintiff is not more than 50 percent at fault. A person who is the victim of medical malpractice can sue for the injuries and all direct consequences of those injuries. "Direct consequences" include any mental or physical pain and suffering caused by the careless doctor, and any lost wages resulting from the injury.

Consent

Consent is the most frequently asserted affirmative defense in medical malpractice lawsuits. In order to establish the affirmative defense of consent in Texas a defendant must show that the patient was informed of all risks associated with a procedure and that the defendant did not go beyond the procedure to which the plaintiff consented.

Doctors and hospitals try to protect themselves from medical malpractice lawsuits by having patients sign consent forms before they receive treatment. These consent forms typically include warnings that medicine is not an exact science, and that patients must assume all the risks of any procedures. By signing a consent form, a person does not give up all his or her rights to sue the medical professional if things go wrong. First, such an agreement may not be valid if the doctor does not fully inform the patient of the risks associated with the particular procedure. In other words, only a complete and informed consent is valid. However, even a valid consent form is no protection for a doctor who either acted beyond the scope of the consent or failed to perform the procedure according to well-accepted medical standards. A patient also may sue a medical professional if a person other than the one named on the consent form performs the procedure.

Legal Malpractice

An increasingly common target of professional malpractice lawsuits is lawyers themselves. Although there is no precise definition of legal malpractice, generally speaking, a lawyer commits legal malpractice when he or she fails to provide quality legal services to a client. Most legal malpractice lawsuits are based in negligence. Bad conduct that is not unique to lawyers may lead to a lawsuit, but does not constitute legal malpractice. For instance, a lawyer who misses deadlines, inadequately prepares for a trial, misses numerous court dates, hearings, or appointments with the client, or represents both sides in a dispute without informing both parties, commits legal malpractice. A lawyer who steals funds from the client, or assaults the client, has committed a crime but probably has not committed legal malpractice.

A legal malpractice lawsuit based in negligence has four elements that parallel the elements of any negligence lawsuit--existence of an attorney-client relationship, breach of the duty owed to the client, injury to the client, and causation between the lawyer's actions and the harm to the client. A judge or jury examines all four elements in a legal negligence trial and if any element is missing, the plaintiff cannot recover.

Existence of an Attorney/Client Relationship

The duty that a lawyer owes a client has two components--legal competency and fiduciary obligations. The lawyer must exercise the legal skill that a competent attorney would exercise and must meet all of his or her fiduciary obligations to the client. No lawyer is expected to know the law so well that he or she can give perfect answers to every legal question, but lawyers are expected to know how to research issues and to recognize the limit of their knowledge when they reach an unsettled or unclear area of law. A lawyer's fiduciary duty includes undivided loyalty to the client's interests and confidentiality. As part of this fiduciary duty, a lawyer has an obligation to disclose any conflicts of interest that might impair his or her loyalty to the client or any personal constraints that might affect his or her ability to represent the client.

Many legal malpractice suits have centered on the question of when these duties to a client arise. There is an important distinction between consulting an attorney about a legal matter and retaining that attorney to handle the matter. Generally speaking, only retaining an attorney obligates him or her to act on behalf of a client. Many people have learned this lesson the hard way. They thought that consulting a lawyer about their legal problem meant their case was being handled by that attorney so stopped taking steps to pursue the claim. Meanwhile, the lawyer allowed the statute of limitations to run out on the claim because the lawyer did not believe that he or she had been retained to act on the client's behalf. Many legal malpractice suits have disputed whether an original office visit with a lawyer constituted a consultation or a hiring. Closely related to the issue of whether an attorney/client relationship has been formed in an initial consultation is that of whether an attorney gives legal advice to a potential client during the initial consultation. The lesson for lawyers and prospective clients is that they be absolutely clear whether the lawyer has or has not been hired. If an attorney declines to handle a case, he or she should take care to suggest that the individual seek other counsel.

Breach of Duty to the Client

Breach of duty often is the toughest element to prove in a legal malpractice lawsuit because a lawyer can make mistakes and still not commit professional malpractice. Law is an inexact science. Competent lawyers frequently disagree on the best course of action in a particular legal matter. Sometimes, the strategy that a lawyer chooses to pursue in a particular matter is a combination of knowledge about the law and strategizing about how a judge or jury will react to the facts of a case. A client may be able to show that another lawyer would have pursued a different strategy, but not necessarily show that the first lawyer breached his or her duty. Even an error in judgment does not create negligence liability as long as it is within the bounds of honest exercise of professional judgment. Expert testimony generally is required to establish the standard of care that should be applied to an attorney whose conduct is alleged to constitute legal negligence. However, there are some behaviors almost any judge or jury could call legal negligence even in the absence of expert testimony. For example, if an attorney missed a filing deadline and allowed a statute of limitations to expire, thereby causing the court to deny the lawsuit, then the client would have a strong case for legal malpractice.

Legal Injury

When a plaintiff claims breach of duty, the plaintiff must show not only the alleged breach of duty, but the injury caused thereby. A lawyer might miss a deadline, but if he or she subsequently is granted an extension, the client is not injured. If missing the deadline bars the plaintiff's claim, the plaintiff has a better chance of demonstrating an injury. A lawyer might forget to assert a claim, but if the claim would have been denied anyway, the client has not been injured. Usually a plaintiff in a legal malpractice action only can recover direct economic losses, such as the money needed to pay another attorney to re-do legal work, or any fees or penalties paid, because of an attorney's negligence. It is difficult, although not impossible, to recover for speculative losses (what might have happened if a different lawyer had been hired), emotional losses, or legal expenses incurred hiring a new lawyer to sue the previous lawyer.

Proving legal malpractice can be difficult because merely losing a case is not sufficient grounds to recover for negligence. Many strategic legal decisions are based on an attorney's background and experience. Even if a lawyer made a significant error in judgment that the client thinks caused the case to be lost, he or she does not automatically have the basis for a legal malpractice lawsuit. The same standard of reasonableness that applies in other areas of tort law also applies here. An attorney's honest mistake will be judged against what a reasonable and knowledgeable attorney would have done.

Causation

Finally, as is true with medical malpractice claims, the plaintiff in a legal malpractice action must show that the breach was both the actual and proximate cause of the plaintiff's injury. An attorney's actions are the cause in fact of a client's injury if, but for those actions, the client would not have been harmed. Proximate cause means the breach was sufficiently responsible for, or sufficiently related to, the injury such that the lawyer should be held responsible.

Causation is easiest to prove if a lawyer misses a deadline or gives advice that is clearly wrong. In these cases, the client usually can show exactly what would have happened had the lawyer met the deadline or given correct advice. Causation is more difficult to show when a lawyer pursues a wrong course of action in trial. In this case, the client has to show what the judge or jury would have done had the lawyer chosen another strategy. This can be difficult. The client needs to prove, to the judge's or jury's satisfaction, what another lawyer would have done, and how the jury and/or judge would have reacted to that strategy. The first lawyer might argue successfully that even if a different strategy had been pursued, the outcome of the case would have been the same.

Accountant Malpractice

As is true for doctors and lawyers, accountants can be sued for negligence if they perform a service at a level below that expected of a competent accountant. An accountant is not liable merely because of an honest mistake; he or she must be found to have made an error that a reasonable accountant would not have made.

Accountant malpractice lawsuits differ in a number of important ways from medical or legal malpractice lawsuits. One of the most important differences between accountant negligence lawsuits and medical or legal negligence lawsuits is the role played by written compilations of standards of conduct for the accounting and auditing professions. These rules, known as Generally Accepted Accounting Principles (GAAP) and Generally Accepted Auditing Standards (GAAS), frequently are used in accountant malpractice lawsuits to judge the actions of defendants. Although mere adherence to these standards is not an absolute defense to negligence liability, it is a powerful defense against an allegation of negligence if a defendant can show that his or her actions complied with a rule found in GAAP or GAAS.

Another way in which accountant malpractice lawsuits differ from medical or legal malpractice lawsuits is that many accountant malpractice cases are based on violations of federal and state statutes relating to the sale of securities. Accountants' financial statements frequently are used in connection with various kinds of securities offerings and frequently are submitted with annual reports or other periodic filings companies must make in order to comply with requirements of the Securities and Exchange Commission. If the financial statements are erroneous and negatively impact the market, then investors may try to recoup their losses by asserting securities claims against the accountants who prepared the statements. The statutes most commonly used to bring claims against accountants are the Securities Act of 1933, the Securities Act of 1934, and the Racketeer Influenced and Corrupt Organizations Act (RICO). Each of these Acts is quite complex and a discussion of their intricacies is beyond the scope of this chapter, but an attorney experienced in defending accountants against charges of professional malpractice can advise accountants of their responsibilities and potential liabilities.

Engineer and Architect Malpractice

Engineers and architects also can be sued for malpractice. Engineers and architects can be liable for the actual construction and design of a building if the structure proves unsafe or unsound, or they can be liable for negligent review of a building under construction or remodeling. If an engineer or architect reviews a structure and declares it sound to a perspective buyer, and it is discovered later that the building needed structural repairs, the buyer may have grounds for a professional malpractice lawsuit against the engineer or architect.

Lawsuits that allege that an architect or engineer committed professional malpractice differ substantially from medical or legal malpractice lawsuits in that virtually all agreements between an architect or engineer and an owner are in standardized written contracts. These lawsuits hinge more on interpretation of contract than on the application of common law principles. Another distinguishing factor of professional malpractice lawsuits against engineers and architects is that standard contracts used in the engineering and architecture professions often call for disputes to be submitted to binding arbitration. The Contract Law Chapter addresses general issues of contract law interpretation, and the Alternative Dispute Resolution Chapter describes the arbitration process.

The standard contract used by engineers and contractors can be modified. However, architects and engineers should seek advice from an attorney experienced in disputes between owners and architects or engineers before agreeing to modify the terms of a standard form contract. Often, even seemingly innocuous language changes can substantially shift liabilities between the parties. For example, disputes often arise over the standard of care to be applied in judging the professionals' actions. The standard of care against which an engineer's or architect's actions generally are judged is the "ordinary and reasonable skill usually exercised by one in that profession." Some owners suggest changing the language to require the architect or engineer to exercise the "highest professional standards." While these words may appear to be innocuous, an engineer or architect never should agree to such language in a contract, because they can set impossibly high standards for any architect or engineer to meet.

Medical malpractice lawsuits have been targeted as one of the factors contributing to the spiraling costs of health care. Because they have increased dramatically both in frequency and in the amount of damages awarded, the price doctors pay for malpractice insurance has soared. Of course, insurers then pass the increased costs on to their customers in a seemingly endless cycle. Calls frequently are heard in Congress and in state legislatures to put caps on the amount of money judges or juries can award in medical malpractice lawsuits. Proponents of this legislation argue that people hurt by bad medical care should be compensated, but that the current system relies too heavily on emotional appeals in the courtroom and less on reasoned analysis of how much the victims of medical malpractice truly need to be compensated for their losses.

Legal malpractice cases are increasing based in new theories of liability. One trend focuses on attorney investments and financial dealings. Courts have found that a lawyer breached a fiduciary duty to a client by failing to reveal stock ownership in an opposing corporate party or by using insider information learned about the client to make profits in the stock market. Another trend is for the court to allow claims against lawyers by persons other than clients. For example, the beneficiaries under a client's will might bring a legal malpractice action against a lawyer for incorrectly drafting a deceased client's will. Depositors in a failed savings and loan company might sue lawyers who gave advice to the savings and loan.

While the number of professional malpractice lawsuits against doctors is leveling off nationally, the number of professional malpractice lawsuits against accountants is on the rise. Various theories explain why lawsuits against accountants are becoming more common. Perhaps the most likely explanation is that with the growing number of business insolvencies, lenders and investors are looking to other parties from whom to recoup losses. Accountants appear to be an easy target because often they are close to the heart of business decision making. Whatever the reason for the increasing number of lawsuits against them, accountants need to be aware of the ways they can become liable for the results of their work.

Irving J. Sloan, Professional Malpractice (Oceana Publications, Dobbs Ferry, NY 1992).

Thomas J. Shroyer, Accountant Liability (Wiley Law Publications, New York, NY 1995).

Architect and Engineer Liability: Claims Against Design Professionals (Robert F. Cushman & Thomas G. Bottum, eds., Wiley Law Publications, New York, NY, 2d ed. 1995).

James Acres, Architects and Engineers (Shepard's/McGraw-Hill, Colorado Springs, CO, 3d ed. 1993).

James T. O'Reilly & Nancy C. Cody, The Products Liability Resource Manual: An Attorney's Guide to Analyzing Issues, Developing Strategies, and Winning Cases (American Bar Association, General Practice Section, Chicago, IL 1993).

To obtain a free pamphlet entitled What to Do in Case of an Auto Accident, write or call the State Bar of Texas, P.O. Box 12487, Austin, TX 78711, (512) 463-1463.