In a 6-1 opinion, the Maryland Court of Appeals decided Blondell v. Littlepage, affirming the Court of Special Appeals decision which rejected a tort and breach of contract lawsuit brought by a lawyer against a malpractice lawyer regarding a case he referred to her.
The lawyer referred a cancer misdiagnosis case involving an allegedly misread mammogram to a malpractice lawyer. Both lawyers agreed to a fee split. The original lawyer had already filed the malpractice lawsuit on behalf of the Plaintiff, before referring the case out. I’m not sure what the referring lawyer was thinking when he filed suit. Perhaps he was hoping the case would settle or maybe he later decided the client would be better served with a lawyer who focuses on malpractice cases. The court does not indicate the reason for the referral.
Anyway, the case settled for a lot less that the pretrial judge recommended, which upset the referring lawyer, as did the suggestion allegedly made by the malpractice lawyer to the client, that the referring lawyer’s failure to timely file the case with the court decreased the settlement value of the case. The malpractice lawyer went so far as to give the client names of legal malpractice lawyers to bring a claim against the referring lawyer.
The court found the referring lawyer had no claim against the malpractice lawyer, following the rationale of the Court of Special Appeals, because (1) there was no contractual provision breached; (2) there was no tort because there was no duty of communication under the language of the fee splitting agreement to communicate with the referring lawyer; and (3) the malpractice lawyer could not intentionally interfere with a contractual or economic relationship to which she was a party. (I summarize the CSA opinion here.
As he often does, Judge Bell dissented, questioning much of the majority’s logic but taking particular exception to the theory that wrongly badmouthing (for lack of a better word) co-counsel by one of the lawyers is not actionable:
A co-counsel relationship does not, in my view, negate or foreclose a separate, consistent relationship between each one of the attorneys and the clients. Were the situation reversed, I cannot imagine that the clients would be restricted to an action against both attorneys as a unit or that the viability of the clients’ cause of action against their attorneys would be made to depend on the relationship they had with one of the co-counsel and the actions of that co-counsel, without any regard to any relationship they may have had with the other or any actions he or she may have engaged in. Moreover, and to me, more important, if the majority is correct, an attorney, without fear of consequences and with impunity, may undermine his or her co-counsel’s relationship with the clients and denigrate, without fear of retribution, not simply his or her legal competence but any other attribute or quality upon which a client reasonably relies and without which the client is not likely to be willing to trust. This would be a troubling outcome, especially in a profession where an attorney’s livelihood largely rests upon his reputation.
The majority opinion provides a nice history of legal fee splitting, including this tidbit:
The genesis of such a referral or finder’s fee in America may well be traceable to the practice of countryside solicitors in England who, when faced with litigation, would associate London solicitors as agents. An agent would in turn retain a barrister from the Inns of Court to take full charge of the litigation, with the custom being that the referring solicitor would share in one-third of the resulting fee. Thomas J. Hall & Joel C. Levy, Intra-Attorney Fee Sharing Arrangements, 11 Val. U. L. Rev. 1, 2 (1976) (footnote omitted).
The one-third fee split in co-counsel cases is still relatively common today and, hint hint, is typical of what our firm does with referring lawyers in serious personal injury cases. It is also worth noting that all of our fee splitting arrangements with co-counsel are consistent with Rule 1.5 of the Rules of Professional Conduct which covers fee sharing (and is discussed in this opinion).
You can read the full opinion here.