In Pari Delicto Deconstructed: Dismantling the Doctrine that Protects the Business Entity's Lawyer from Malpractice Liability

(Excerpt) Following this introduction, Part I discusses a representative case in this area. The court’s decision highlights the typical reasoning for barring a malpractice claim against a lawyer even when the lawyer facilitated agent misconduct that severely damaged an entity client. Then, Part II considers each of the principles underlying the in pari delicto defense in organizational client legal malpractice cases. Each principle is juxtaposed with attorney fiduciary duty law.

Part III considers some variations on the in pari delicto doctrine and whether these variations are more compatible with an organization’s attorney’s fiduciary duty. Having determined that attorney fiduciary duty is at odds with in pari delicto in the organizational client context, Part IV explores why the doctrines should be aligned and determines how best to accomplish that reconciliation. This Part considers when imputation may still be appropriate and discusses the safeguards that could prevent organizational clients from shifting all of the costs of agent misconduct to outside counsel. Finally, the Article concludes with thoughts about the benefits for businesses and the legal profession when lawyers face liability for failing to protect their organizational clients from liability.