September 2013 - The Unassuming Plaintiff: Attorneys’ Duties to Non-Clients

by Heather Porter Condon

An attorney’s duties to a client arise from the existence of an attorney-client relationship, and include, but are not limited to, the duty of loyalty, the duty to avoid conflicts of interest, the duty of competent representation, the duty of confidentiality, a fiduciary duty, and the duty of care. An attorney’s betrayal of any one of these duties may result not only in discipline premised on a violation of the California Rules of Professional Conduct, but may also give rise to a claim of professional negligence—or, legal malpractice.

But, what about with respect to non-clients? In other words, can an attorney’s duties, and resulting liability for legal malpractice, extend to third parties outside of, and unprotected by, the attorney-client relationship?

Traditionally, the answer in California was “no.” Absent fraud or collusion, an attorney’s liability extended only to clients with whom the attorney was in privity by contract. “[A]n attorney is liable for negligence in the conduct of his professional duties, arising only from ignorance or want of care, to his client alone—that is, to the one between whom and the attorney the contract of employment and service existed, and not to third parties.” Buckley v. Gray, 110 Cal. 339, 342 (1895); see also Chang v. Lederman, 172 Cal. App. 4th 67, 76 (2009). The only exceptions to the “privity by contract” rule were “where the attorney ha[d] been guilty of fraud or collusion, or of a malicious or tortious act”—in situations where more than mere negligence was required. Buckley, 110 Cal. at 342-43.

Today, the privity by contract rule as articulated by the California Supreme Court in Buckley still generally applies. However, it is no longer absolute. See Fox v. Pollack, 181 Cal. App. 3d 954, 960 (1986) (“With certain exceptions, an attorney has no obligation to a non-client for the consequences of professional negligence—that is, the attorney is not burdened with any duty toward non-clients merely because of his or her status as an attorney”); Borissoff v. Taylor & Faust, 33 Cal. 4th 523, 529 (2004) (“[A]n attorney will normally be held liable for malpractice only to the client with whom the attorney stands in privity of contract, and not to third parties”). Instead, in the years following the Buckley decision, the rule has been questioned and successfully challenged. California courts have gradually chipped away at the steadfast rule requiring privity and, in doing so, have carved out a number of exceptions in which they have held attorneys liable to non-client plaintiffs on theories based on ordinary negligence. Gone are the days when an attorney need only be mindful of the interests of his or her client.

The slow erosion began over a half-century ago with the California Supreme Court’s holding in Biakanja v. Irving, 49 Cal. 2d 647 (1958). In Biakanja, the court permitted an intended beneficiary of a will to recover against the notary public who had failed to properly attest the will, despite the lack of privity between the notary and the beneficiary. In doing so, the Biakanja court abandoned its earlier holding in Buckley v. Gray and carved out an exception to the “privity by contract” rule. The court’s holding, however, was not without limitation:

The determination whether in a specific case the defendant will be held liable to a third person not in privity is a matter of policy and involves the balancing of various factors, among which are the extent to which the transaction was intended to affect the plaintiff, the foreseeability of harm to him, the degree of certainty that the plaintiff suffered injury, the closeness of the connection between the defendant’s conduct and the injury suffered, the moral blame attached to the defendant’s conduct, and the policy of preventing future harm.

Id. at 650. In concluding that the notary owed a duty to the intended beneficiary, the California Supreme Court placed particular importance on the “end and aim” of the transaction—that is, the passing of the decedent’s estate to the intended beneficiary. Id. at 650-51.


Three years later, the Supreme Court of California extended the rationale it applied in the Biakanja decision to attorneys, allowing certain beneficiaries of a will to recover against the attorney drafter whose negligence in drafting the will resulted in a reduction of the beneficiaries’ share of the estate. Lucas v. Hamm, 56 Cal. 2d 583 (1961). In Lucas, the attorney-drafter negligently prepared a will containing a residuary trust that arguably violated the rule against perpetuities and statutory restraints on alienation. As a result of the attorney’s negligence, after the testator’s death, the plaintiff beneficiaries were forced to enter into a settlement with certain of the testator’s relatives under which they received a lesser amount than they would have received had the will been drafted in accordance with the testator’s directions. Id. at 586-87.

In determining whether the plaintiff beneficiaries were entitled to bring an action for negligence against the attorney, the Lucas court applied the same general principles articulated in Biakanja. Id. at 588 (“[The] same general principle must be applied in determining whether a beneficiary is entitled to bring an action for negligence in the drafting of a will when the instrument is drafted by an attorney rather than by a person not authorized to practice law.”). Similar to its holding in Biakanja, the court paid particular attention to the “end and aim” of the transaction:

As in Biakanja, one of the main purposes which the transaction between defendant and the testator intended to accomplish was to provide for the transfer of property to plaintiffs; the damage to plaintiffs in the event of invalidity of the bequest was clearly foreseeable; it became certain, upon the death of the testator without change of the will, that plaintiffs would have received the intended benefits but for the asserted negligence of defendant; and if persons such as plaintiffs are not permitted to recover for the loss resulting from negligence of the draftsman, no one would be able to do so and the policy of preventing future harm would be impaired.

Id. at 589. However, because the defendant in Lucas was an attorney (rather than a notary public), in addition to the factors articulated in Biakanja, the court also considered “whether the recognition of liability to beneficiaries of wills negligently drawn by attorneys would impose an undue burden on the profession.” Id. Answering in the negative, the court found that extending the attorney’s liability to the beneficiaries injured by the attorney’s negligent drafting did not place an undue burden on the profession, especially in considering the potential loss to the beneficiaries. Id. As in Biakanja, the Lucas court concluded that “intended beneficiaries of a will who lose their testamentary rights because of failure of the attorney who drew the will to properly fulfill his obligations under his contract with the testator may recover as third-party beneficiaries.” Id. at 591.


Today, while the privity by contract rule still generally controls, recent case law indicates that an attorney may be held liable to a non-client plaintiff under certain, limited circumstances. After Lucas, “attorneys acting for their clients have been held liable to third parties in other transactions which were intended to directly benefit the third party, or in which the potential harm to the third party from professional negligence was reasonably foreseeable.” Fox, 181 Cal. App. 3d at 961.

Largely derived from the California Supreme Court’s holdings in Biakanja and Lucas, California courts generally consider the following factors in determining whether to impose liability on an attorney for his or her acts in connection with a non-client: the extent to which the transaction was intended to affect the plaintiff; the foreseeability of the harm to the plaintiff; the degree of certainty that the plaintiff suffered injury; the closeness of the connection between the defendant’s conduct and the injury suffered; the “moral blame” attached to the defendant’s conduct; and, the policy of preventing future harm. Biakanja, 49 Cal. 2d at 650.

More recent cases have considered the following additional factors: the likelihood that imposition of liability may interfere with the attorney’s ethical duties to his or her client, and the burden that the extension of liability would place on the profession. Goodman v. Kennedy, 18 Cal. 3d 335, 344 (1976) (In California, an attorney’s duty to non-clients depends on “a judicial weighing of the policy considerations for and against the imposition of liability under the circumstances”); St. Paul Title Co. v. Meier, 181 Cal. App. 3d 948, 951-53 (1986); Osornio v. Weingarten, 124 Cal. App. 4th 304, 330-35 (2004); see also Vapnek & Tuft, et al., Cal. Prac. Guide: Prof. Resp. Ch. 6-D 6:244 (The Rutter Group 2013).

Thus, although California has modified the rule requiring privity by contract as a prerequisite to the imposition of liability against attorneys for the consequences of their professional negligence, the circumstances under which liability to third parties has been imposed are limited to situations wherein the third party is the intended beneficiary of the attorney’s services, or the foreseeability of harm to the third party as a consequence of professional negligence is not outweighed by other policy considerations.

St. Paul Title Co., 181 Cal. App. 3d at 951.


Over the years, this rationale and the above-listed factors have been applied in a number of situations establishing certain fact patterns where an attorney may be held to owe a duty, and as a result be subject to liability, to third-party non-clients.

Third Party as an Intended Beneficiary of the Attorney’s Services
An attorney owes a duty, and thus may be held liable, to intended beneficiaries of a will who suffer injury as a result of the attorney’s negligent drafting. Liability in this regard is based on the premise that “[when] an attorney undertakes to fulfill the testamentary instructions of his client, he realistically and in fact assumes a relationship not only with the client but also with the client’s intended beneficiaries.” Heyer v. Flaig, 70 Cal. 2d 223, 228 (1969). Accordingly, “an attorney who negligently fails to fulfill a client’s testamentary directions incurs liability in tort for violating a duty of care owed directly to the intended beneficiaries.” Id. at 226. A number of decisions following Heyer have held likewise. See, e.g., Osornio, 124 Cal. App. 4th at 304; Garcia v. Borelli, 129 Cal. App. 3d 24 (1982).

Importantly, an attorney’s duty of care, and thus his or her risk of liability, extends only to “intended” beneficiaries; “incidental” beneficiaries generally are not owed the same duty. Goldberg v. Frye, 217 Cal. App. 3d 1258, 1268 (1990). “The fact that third parties are thus benefited, or damaged, by the attorney’s performance does not give rise to a duty by the attorney to such third parties, and hence cannot be the basis for a cause of action by the third parties for the attorney’s negligence.” Id.

Third-Party Trust or Estate Beneficiaries Affected by the Attorney’s Conduct
Similarly, an attorney retained by a trustee or personal representative assumes a duty of care to the beneficiaries. Accordingly, under certain, specific circumstances, attorneys who represent the trustee or personal representative of the estate have been found liable to third-party trust or estate beneficiaries where the attorneys’ negligent conduct foreseeably affects the beneficiaries’ interests. Bucquet v. Livingston, 57 Cal. App. 3d 914 (1976) (recognizing beneficiaries’ claim against attorney for negligence in his drafting of the settlors’ living trust); Pierce v. Lyman, 1 Cal. App. 4th 1093 (1991) (recognizing beneficiaries’ claim against attorney to recoup losses resulting from the trustees’ breach of fiduciary duty).

Third Parties Whose Interests Are Closely Related to Those of the Client
At least one California case has imposed a duty on an attorney to inform a third party of the existence of a potential claim that was closely related to or determinative upon the claim or claims of the attorney’s primary client. The court in Meighan v. Shore, 34 Cal. App. 4th 1025 (1995) held that a lawyer’s duty can extend to the client’s spouse “where both spouses consult an attorney with respect to a personal injury suffered by one of them and the attorney knows or could readily ascertain that the other spouse has a potential claim for loss of consortium, and where that spouse is unaware of his or her rights.” Id. at 1030.

Attorney’s Misrepresentation of Material Fact
Despite a lack of privity, attorneys in California have been held liable to third parties for misrepresentations of material fact where it is likely that such misrepresentations will reach a third party. Vega v. Jones, Day, Reavis & Pogue, 121 Cal. App. 4th 282 (2004) (holding that attorneys for a party to a merger owed a duty not to mislead the other party’s shareholders by concealing certain terms of an investment transaction the attorneys knew would have a substantial effect on those shareholders and their decision whether to approve the merger); Shafter v. Berger, Kahn, Shafton, Moss, Figler, Simon & Gladstone, 107 Cal. App. 4th 54 (2003) (holding that the attorney retained by an insurance company owed the insured’s judgment creditors a duty not to make fraudulent statements about the insurance coverage provided); Roberts v. Ball, Hunt, Hart, Brown & Baerwitz, 57 Cal. App. 3d 104 (1976) (holding a law firm and one of its attorneys liable to a prospective lender for negligent misrepresentations where they provided their client with an opinion letter containing incorrect or misleading information on which the lender was to rely in loaning money to the client).

Misrepresentations or Omissions to Third-Party Investors in Connection with a Securities Offering
When the client is the conduit of the misrepresentation or omission, for example in the realm of securities offerings, a similar rationale applies. Where a corporation is found liable to its investors for certain misrepresentations or omissions made in connection with a securities offering, courts have found the corporation’s attorney liable for failing to correct the false or misleading materials. “Part and parcel of effectively protecting a client, and thus discharging the attorney’s duty of care, is to protect the client from the liability which may flow from promulgating a false or misleading offering to investors.” FDIC v. O’Melveny & Myers, 969 F.2d 744, 749 (9th Cir. 1992), rev’d on other grounds, 512 U.S. 79 (1999). Thus, courts have conferred upon securities counsel a duty to make a reasonable and independent investigation of materials disseminated in connection with a securities offering.

Third-Party Creditors
California courts have further held an attorney retained by a collection agency liable to a creditor on whose behalf the collection agency initiated suit. For example, an attorney has been held liable to a creditor where the collection proceeding was dismissed for lack of prosecution due to the attorney’s negligence, on the grounds that the creditor was the intended beneficiary of the collection agency’s action against the debtor. Donald v. Garry, 19 Cal. App. 3d 769 (1971).

The above collection is by no means an exhaustive list. For any attorney, it should at the very least raise an eyebrow. In the modern-day practice of law, an attorney must be wary of the duties that he or she may owe to a non-client, and the resulting liability that he or she may incur as a result of the failure to execute those duties.


Heather Porter Condon is a member of the OCBA Professionalism and Ethics Committee. She may be reached at haporter79@yahoo.com.