"Limitations on Third-Party Claims for Contribution Against Professionals – Measure of Damages Sought in First-Party Action is the Critical Factor" by Andrew S. Kowlowitz, published in Professional Liability Underwriting Society (PLUS) Journal6/2010

The New York Courts have implicitly adopted the "economic loss rule" to bar third-party claims against professionals, including, most recently, a law firm. Typically, a third-party claim for contribution against a professional does not become "ripe" unless and until there is an adjudication or settlement of the corresponding first-party claim, because only then can a defendant maintain that a third-party professional caused or contributed to its loss. However, under certain circumstances, proactive claims handling can short-circuit this process. Dispositive motion practice on a pre-discovery basis may be appropriate when the first-party action seemingly sounds in "contract;" a plaintiff seeks purely "economic loss" and only to be returned "to the point at which the breach arose and to be placed in as good a position as it would have been" absent the breach.

To read a detailed explanation of the law and to view the article in its entirety, click here and scroll to page 3.
You can also view the article at the Professional Liability Underwriting Society.

Andrew's bio | email

Back to presentations list >

Home | Email | Site map | Client Rights | Disclaimer | Top of page