Legal Malpractice Actions Now Subject to Six-Year Statute of Repose

On January 2, 2013, the Michigan Legislature enacted new legislation that can have the effect of “trumping” the previous six-month discovery rule applicable to attorney malpractice claims.

Previously, legal malpractice claims were subject to a two-year statute of limitations (two years from the last date of service performed by the attorney), with a six-month “discovery rule” exception. That exception provided that, if the client learned of the attorney’s malpractice claim outside of that two-year statute of limitations, the client could still bring a malpractice claim within six months of learning of the malpractice.

All of this still holds under the new legislation, but with a critical new caveat: No attorney malpractice can be filed more than six years after the act or omission that gives rise to the malpractice claim.

This so-called “statute of repose” puts a six-year time horizon on legal malpractice claims, regardless of when the malpractice was discovered by the client.

Good News, Bad News

While this sounds like good news for attorneys, it can be bad news for potential clients. Suppose a client receives a letter from the IRS seven years after a given matter, clearly demonstrating that legal counsel was negligent. While he may have only discovered the negligence today, he is now prohibited from bringing a malpractice claim against the attorney because “today” is outside of that six-year window.

We can envision that the new statute of repose will come into play for attorney malpractice claims arising from the preparation of transactional documents or wills and trusts, when the document was created years before a dispute arises and therefore, before an attorney’s potential negligence is discovered.

It remains to be seen whether this additional protection will be good for the profession in the long run and whether the legislature or Michigan’s appellate courts will eventually take steps to limit the harsh impact of such legislation on our clients.

For more information about the six-year statute of repose, contact Ken Neuman via email or call (248) 594-5252.