Liability of Lawyers and Accountants to Non-Clients: Negligence and Negligent Misrepresentation

67 Rutgers University Law Review 127 (2015)

40 Pages Posted: 15 May 2015

Date Written: April 15, 2015

Abstract

Once lawyers and accountants were rarely if ever liable to non-clients for professional negligence. Today that is no longer the case; lawyers and accountants are potentially liable for failing to exercise reasonable care in a variety of settings. But the doctrines applied in these cases vary widely, and the approaches of the jurisdictions in the application of the doctrines vary even more.

The issues in this area were defined by two landmark opinions by Chief Judge Cardozo of the New York Court of Appeals: Glanzer v. Shepard, 135 N.E. 275 (N.Y. 1922), and Ultramares Corp. v. Touche, 174 N.E. 441 (N.Y. 1931). The issues are: Is there a difference between the negligence and negligent misrepresentation causes of action? Under either or both causes of action, in what cases should a court find a duty? The issues have currency in the case law, in recent statutory enactments, and in the Restatement (Third) of Torts: Liability for Economic Harm, currently being considered by The American Law Institute. This article describes the deeper approaches underlying the cases to suggest that the answers to the two issues are: “no” and “it depends.”

Keywords: torts, professional liability, economic loss, lawyers, accountants

JEL Classification: K12, K13

Suggested Citation

Feinman, Jay M., Liability of Lawyers and Accountants to Non-Clients: Negligence and Negligent Misrepresentation (April 15, 2015). 67 Rutgers University Law Review 127 (2015), Available at SSRN: https://ssrn.com/abstract=2606247

Jay M. Feinman (Contact Author)

Rutgers Law School ( email )

Newark, NJ
United States
856-225-6367 (Phone)

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