Reed Smith can't arbitrate malpractice claim; ex-client, an attorney, didn't sign required form
Reed Smith has lost its bid to arbitrate a malpractice claim concerning a $20.5 million insurance settlement over a 2012 fire in a former client’s Villanova, Pennsylvania, mansion.
There was a mandatory arbitration provision in the law firm’s engagement letter. But then-homeowner Jerald Batoff, who himself is an attorney, said it didn’t apply. For one thing, he didn’t sign an arbitration disclosure form required by state law, which was attached to the engagement letter as a rider, reports the Legal Intelligencer (sub req.).
Batoff also contended that the rider failed to inform the client adequately of the jury trial and discovery rights being waived, and said the waiver form should be disregarded because he wasn’t represented by independent counsel.
A Philadelphia Court of Common Pleas judge apparently agreed with at least some of Batoff’s argument, nixing Reed Smith’s motion seeking arbitration in a one-line order that was docketed Thursday.
At issue in the malpractice suit is Reed Smith’s counsel to Batoff concerning tenant rights related to the settlement. He says he followed the law firm’s advice in settling the fire claim with his insurer, even though the pact required him to indemnify the carrier concerning a potential tenant claim. In fact, his tenants did sue, and Batoff says he has had to pay $500,000 in legal fees, as a result, and worry about whether he could be held liable for damages.
A lawyer for Reed Smith didn’t respond to a request for comment by the legal publication.