Opinion ID: 2227403
Heading Depth: 1
Heading Rank: 3

Heading: Assignability and Public Policy

Text: Today, it seems anachronistic to resolve the issue of the assignability of a legal malpractice claim by deciding whether such a claim would survive the client's death. The parties to this litigation have not even briefed the survival issue. As is sometimes the case with the common law, the rule has outlived the reason for its creation. The customs, beliefs, or needs of a primitive time establish a rule or a formula. In the course of centuries the custom, belief, or necessity disappears, but the rule remains. O.W. Holmes, The Common Law 5 (1881). Where such is the case, this Court has been willing finally to reexamine the basis of the rule. Campbell v. State (1972), 259 Ind. 55, 58, 284 N.E.2d 733, 734. Assignment should be permitted or prohibited based on the effect it will likely have on modern society, and the legal system in particular. This is a question properly within our purview as common law judges, but it is particularly appropriate for this Court to fashion a new rule based on public policy because the Indiana Constitution vests us with exclusive original jurisdiction over matters relating to the practice of law. Ind.Const. art. VII, § 4. The difficulty that other state courts have experienced in trying to apply the survival test reinforces the correctness of our decision to look first to public policy. Courts in at least eleven states have considered the question before us today. Seven have refused to permit assignment, [4] only four permit it. [5] Most of these courts have acknowledged that the common law links assignment to survival. A few explore whether a legal malpractice claim actually survives the death of a client. Most skip this issue, and instead compare a legal malpractice claim to those tort and contract actions for which assignment is a matter of settled law. These courts usually conclude that a legal malpractice claim resembles both a claim arising out of a contract for personal services  which is not assignable  and a claim based on tortious injury to personal property  which is assignable. See, e.g., Christison, 83 Ill. App.3d at 338, 39 Ill.Dec. at 562, 405 N.E.2d at 10. But see Schroeder, 142 Ariz. at 399, 690 P.2d at 118 (legal malpractice claims are tort claims subject to two year statute of limitations for personal injuries and are not assignable); Hedlund, 517 Pa. at 526, 539 A.2d at 359 (rights involved in legal malpractice claim akin to property rights that can be assigned). Nearly all these courts found the survival test inconclusive and ultimately turned to public policy. In the first case to address the issue head-on, the California Court of Appeals gave a relatively concise recitation of the many public policy issues involved: The assignment of such claims could relegate the legal malpractice action to the market place and convert it to a commodity to be exploited and transferred to economic bidders who have never had a professional relationship with the attorney and to whom the attorney has never owed a legal duty, and who have never had any prior connection with the assignor or his rights. The commercial aspect of assignability of choses in action arising out of legal malpractice is rife with probabilities that could only debase the legal profession. The almost certain end result of merchandizing such causes of action is the lucrative business of factoring malpractice claims which would encourage unjustified lawsuits against members of the legal profession, generate an increase in legal malpractice litigation, promote champerty and force attorneys to defend themselves against strangers. The endless complications and litigious intricacies arising out of such commercial activities would place an undue burden on not only the legal profession but the already overburdened judicial system, restrict the availability of competent legal services, embarrass the attorney-client relationship and imperil the sanctity of the highly confidential and fiduciary relationship existing between attorney and client. Goodley v. Wank & Wank, Inc., 62 Cal. App.3d at 397, 133 Cal. Rptr. at 87. Our own conclusion that legal malpractice claims should not be assigned is based on our general agreement with Goodley, and our particular concern about two issues: the need to preserve the sanctity of the client-lawyer relationship, and the disreputable public role reversal that would result during the trial of assigned malpractice claims like this one.