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A Significant Ruling in a Legal Malpractice Binding Arbitration

Klein & Wilson‘s client, a major employer in San Diego, hired Higgs, Fletcher & Mack, the largest and oldest law firm in San Diego, to evaluate its employment practices. After making a few tweaks to the company’s policies, the law firm said the company was good to go. Years later, the company’s employees filed a class action lawsuit alleging the company’s policies (which the law firm blessed) violated numerous Labor Code sections. The law firm told the client it would defeat the class action in a summary judgment motion. After mediating the employment class action, the law firm determined its advice was wrong and advised the client to settle. At a binding arbitration before three retired judges, Klein & Wilson proved the law firm breached its fee agreement (by charging fees for work that had no value) and fell below the standard of care (by steering the client into Labor Code violations). On December 19, 2018, the San Diego County Superior Court entered a judgment against the law firm, ordering it to disgorge all its fees and pay damages which, after correcting the arbitration award (increasing the amount the arbitrators awarded), total $1.8 million.

Lead counsel, Mark Wilson, stated, “Even large law firms make mistakes that injure clients. Klein & Wilson is honored it was able to assist Richman Management Corporation and Trolley Security, Inc. in obtaining a successful outcome in this binding arbitration and that Klein & Wilson has become the “go to” firm for legal malpractice cases.”

Details can be found in the attached judgment.