Tort Law

New York appeals court says client can sue lawyer over Wall Street Journal comment

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A former client can sue his lawyer for malpractice over a comment made to the Wall Street Journal, a New York appeals court has ruled.

Founding partner Jeffrey Liddle of Liddle & Robinson had argued that plaintiff Michael Barr can’t prove the media comment caused him to lose a $1.3 million case before an arbitration panel, reports the New York Law Journal (sub. req.).

However, the Appellate Division, First Department, ruled last week that nothing clearly contradicts Barr’s claim that a former employer would have had to pay the $1.3 million in compensation, had it not been for Liddle’s comments to the Wall Street Journal.

At issue is a nondisparagement clause that was part of an employment agreement the securities industry executive had with Robertson Stephens, the article explains.

Laid off along with more than 40 other managers after the 2000 dot-com financial crash, Barr was subject to having his severance package revoked if he made, within six months of termination, “any public statement that is adverse, inimical or otherwise materially detrimental to the interests” of the investment bank or its successor, FleetBoston.

Liddle was retained to represent the group in arbitration over the severance package. A month before the nondisparagement clause expired, he told the Wall Street Journal that “actions during the sale process” by FleetBoston “drove down the value of the employees’ stake in Robertson and damaged their reputations.”

Although the arbitration panel did not explain in its ruling why Barr got no compensation, a dissenting member disagreed that severance payments “purportedly forfeited” due to the WSJ article were appropriately denied.

Barr contends that discovery will prove the basis for the arbitration ruling, the New York Law Journal notes.

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