PROFESSIONAL MALPRACTICE DEMAND LETTER
SENT VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED
AND FIRST-CLASS MAIL
[DATE]
[PROFESSIONAL NAME / FIRM NAME]
[ADDRESS]
[CITY, STATE ZIP]
Copy to:
[PROFESSIONAL LIABILITY INSURANCE CARRIER] (if known)
ATTN: Claims Department
[ADDRESS]
[CITY, STATE ZIP]
Re: PROFESSIONAL MALPRACTICE CLAIM - DEMAND FOR COMPENSATION
Claimant: [CLIENT FULL NAME]
Professional: [PROFESSIONAL NAME]
Engagement Period: [START DATE] to [END DATE]
Matter: [DESCRIPTION OF ENGAGEMENT]
[For Legal Malpractice: Underlying Case: [CASE NAME AND NUMBER]]
Dear [PROFESSIONAL NAME / FIRM NAME]:
This law firm has been retained by [CLIENT FULL NAME] ("Client" or "Claimant") in connection with your professional malpractice during your representation/engagement concerning the above-referenced matter. This letter constitutes formal notice of our Client's claim and demand for compensation for the damages caused by your negligence.
I. INTRODUCTION
TYPE OF PROFESSIONAL MALPRACTICE:
☐ Legal Malpractice - Attorney negligence, breach of fiduciary duty, or breach of contract
☐ Accounting Malpractice - CPA/accountant negligence in auditing, tax preparation, or advisory services
☐ Other Professional Malpractice - [SPECIFY PROFESSION]
This letter provides you with:
1. Notice of the specific acts of professional negligence
2. A summary of the damages proximately caused by your negligence
3. Demand for compensation
4. An opportunity to resolve this matter before litigation
II. PROFESSIONAL ENGAGEMENT BACKGROUND
A. The Professional
| Item | Details |
|---|---|
| Professional Name | [NAME] |
| Firm Name | [FIRM NAME] |
| License Number | [STATE BAR NO. / CPA LICENSE NO. / OTHER] |
| State(s) Licensed | [STATE(S)] |
| Professional Designation | ☐ Attorney ☐ CPA ☐ Enrolled Agent ☐ Other: [SPECIFY] |
| Malpractice Insurance Carrier | [IF KNOWN] |
| Policy Number | [IF KNOWN] |
B. The Engagement
| Item | Details |
|---|---|
| Client Name | [FULL NAME] |
| Nature of Engagement | [DESCRIPTION] |
| Engagement Start Date | [DATE] |
| Engagement End Date | [DATE] |
| Fee Arrangement | ☐ Hourly ☐ Flat fee ☐ Contingency ☐ Retainer ☐ Other |
| Fees Paid | $[AMOUNT] |
| Retainer Balance (if any) | $[AMOUNT] |
C. Engagement Letter/Contract
☐ Written engagement letter dated [DATE] (copy attached)
☐ Written fee agreement dated [DATE] (copy attached)
☐ No written engagement letter - oral agreement
☐ Scope of representation: [DESCRIBE]
SECTION A: LEGAL MALPRACTICE
(Complete this section for legal malpractice claims)
III. THE UNDERLYING MATTER
A. Case Information
| Item | Details |
|---|---|
| Case Caption | [PLAINTIFF v. DEFENDANT] |
| Court | [COURT NAME] |
| Case Number | [NUMBER] |
| Case Type | ☐ Personal injury ☐ Business litigation ☐ Family law ☐ Criminal ☐ Real estate ☐ Estate/Probate ☐ Other: [SPECIFY] |
| Our Client's Role | ☐ Plaintiff ☐ Defendant ☐ Petitioner ☐ Respondent ☐ Third party |
| Amount at Stake | $[AMOUNT] or [DESCRIBE NON-MONETARY STAKES] |
| Adverse Party | [NAME(S)] |
| Adverse Counsel | [NAME(S)] |
B. Engagement Scope
You were retained to represent our Client in the following matters:
[DETAILED DESCRIPTION OF SCOPE OF REPRESENTATION]
C. Summary of Outcome
Due to your negligence, the underlying matter resulted in:
☐ Adverse judgment entered against our Client: $[AMOUNT]
☐ Dismissal of our Client's claims with prejudice
☐ Dismissal of our Client's claims due to missed statute of limitations
☐ Default judgment due to failure to respond to pleadings
☐ Unfavorable settlement necessitated by your errors
☐ Loss of claims/defenses due to failure to assert
☐ Sanctions imposed against our Client
☐ Criminal conviction that should have been avoided
☐ Other adverse outcome: [DESCRIBE]
IV. ACTS OF LEGAL MALPRACTICE
You breached your duty of care to our Client through the following acts and/or omissions:
A. Negligent Acts/Omissions
☐ Missed Statute of Limitations/Deadline
- Applicable deadline: [DESCRIBE - e.g., statute of limitations, filing deadline, response deadline]
- Deadline date: [DATE]
- Date you were retained: [DATE]
- Your failure: [DESCRIBE]
- Result: [DESCRIBE - claim barred, default entered, etc.]
☐ Failure to Investigate/Prepare
- You failed to: [DESCRIBE - interview witnesses, obtain records, hire experts, research law]
- This failure resulted in: [DESCRIBE HARM]
☐ Failure to Communicate
- You failed to: [DESCRIBE - return calls, provide updates, explain options, obtain consent]
- Critical information not communicated: [DESCRIBE]
- Impact on Client's case/decisions: [DESCRIBE]
☐ Failure to Assert Claims/Defenses
- Claims/defenses you failed to assert: [DESCRIBE]
- Basis for those claims/defenses: [EXPLAIN]
- Likely outcome if properly asserted: [DESCRIBE]
☐ Improper Settlement/Resolution
- You settled/resolved without proper authority
- Settlement amount: $[AMOUNT]
- Fair settlement value: $[AMOUNT]
- Your failure: [DESCRIBE]
☐ Conflict of Interest
- Nature of conflict: [DESCRIBE]
- Disclosure made: ☐ Yes ☐ No
- Waiver obtained: ☐ Yes ☐ No
- Harm resulting from conflict: [DESCRIBE]
☐ Breach of Fiduciary Duty
- You breached your fiduciary duty by: [DESCRIBE]
- Self-dealing or improper benefit: [DESCRIBE]
☐ Improper Fee Practices
- Excessive fees charged: $[AMOUNT]
- Unreasonable hourly rate: $[RATE]
- Work billed but not performed
- Commingling of client funds
- Failure to return unearned retainer
☐ Other Negligent Conduct:
[DESCRIBE IN DETAIL]
B. Violation of Professional Rules
Your conduct violated the following Rules of Professional Conduct:
| Rule | Description | Your Violation |
|---|---|---|
| Rule 1.1 | Competence | [DESCRIBE] |
| Rule 1.3 | Diligence | [DESCRIBE] |
| Rule 1.4 | Communication | [DESCRIBE] |
| Rule 1.5 | Fees | [DESCRIBE] |
| Rule 1.6 | Confidentiality | [DESCRIBE] |
| Rule 1.7/1.8/1.9 | Conflicts | [DESCRIBE] |
| Rule 1.15 | Client Funds | [DESCRIBE] |
V. THE "CASE WITHIN A CASE" - UNDERLYING MERITS
To establish legal malpractice, our Client must prove that "but for" your negligence, our Client would have prevailed in the underlying matter. The following demonstrates the merits of the underlying case:
A. Liability in Underlying Matter
[EXPLAIN WHY CLIENT WOULD HAVE PREVAILED ON LIABILITY - evidence, witnesses, legal basis, comparable cases]
B. Damages in Underlying Matter
[EXPLAIN THE DAMAGES CLIENT WOULD HAVE RECOVERED - economic damages, non-economic damages, documentation]
C. Collectibility
[EXPLAIN WHY A JUDGMENT WOULD HAVE BEEN COLLECTIBLE - insurance coverage, assets, ability to pay]
SECTION B: ACCOUNTING MALPRACTICE
(Complete this section for accounting malpractice claims)
III. THE ACCOUNTING ENGAGEMENT
A. Services Provided
You were engaged to provide the following professional services:
☐ Tax Preparation/Planning
- Tax years at issue: [YEARS]
- Type of returns: ☐ Individual ☐ Corporate ☐ Partnership ☐ Trust ☐ Estate
- Returns filed: [LIST]
☐ Audit/Review/Compilation
- Financial statements for: [ENTITY NAME]
- Periods covered: [DATES]
- Type of engagement: ☐ Audit ☐ Review ☐ Compilation
☐ Business Advisory/Consulting
- Nature of advice: [DESCRIBE]
- Transactions involved: [DESCRIBE]
☐ Forensic Accounting
- Purpose: [DESCRIBE]
- Findings: [DESCRIBE]
☐ Other Services:
[DESCRIBE]
IV. ACTS OF ACCOUNTING MALPRACTICE
You breached your duty of care through the following acts and/or omissions:
A. Tax-Related Negligence
☐ Failure to Properly Prepare Returns
- Errors made: [DESCRIBE - wrong deductions, omissions, miscalculations]
- Tax years affected: [YEARS]
- IRS/State notice received: [DESCRIBE]
☐ Failure to Advise on Tax Consequences
- Transaction at issue: [DESCRIBE]
- Advice you gave: [DESCRIBE]
- Correct advice should have been: [DESCRIBE]
- Tax consequences: $[AMOUNT]
☐ Missed Deadlines
- Filing deadline missed: [DATE]
- Extension not filed: ☐ Yes ☐ No
- Penalties incurred: $[AMOUNT]
- Interest incurred: $[AMOUNT]
☐ Failure to Represent in Audit
- Audit notice date: [DATE]
- Your response: [DESCRIBE]
- Audit outcome: [DESCRIBE]
B. Audit/Financial Statement Negligence
☐ Failure to Detect Material Misstatement
- Misstatement: [DESCRIBE]
- Materiality: [EXPLAIN]
- GAAS/GAAP violation: [CITE]
☐ Improper Opinion Issued
- Opinion type issued: [UNQUALIFIED/QUALIFIED/ADVERSE/DISCLAIMER]
- Proper opinion: [WHAT SHOULD HAVE BEEN ISSUED]
- Reliance by third parties: [DESCRIBE]
☐ Failure to Disclose Fraud/Irregularities
- Fraud/irregularities: [DESCRIBE]
- When you knew/should have known: [DATE]
- Your failure: [DESCRIBE]
C. Advisory Negligence
☐ Negligent Business Advice
- Advice given: [DESCRIBE]
- Reasonable advice would have been: [DESCRIBE]
- Reliance: [DESCRIBE]
- Damages resulting: [DESCRIBE]
D. Violation of Professional Standards
Your conduct violated the following professional standards:
| Standard | Description | Your Violation |
|---|---|---|
| GAAS | Generally Accepted Auditing Standards | [DESCRIBE] |
| GAAP | Generally Accepted Accounting Principles | [DESCRIBE] |
| AICPA Code | Professional Conduct | [DESCRIBE] |
| Circular 230 | Treasury Practice Standards | [DESCRIBE] |
| State Board Rules | [STATE] Accountancy Rules | [DESCRIBE] |
SECTION C: DAMAGES (All Malpractice Types)
VI. DAMAGES CAUSED BY MALPRACTICE
Our Client has suffered the following damages as a direct and proximate result of your professional negligence:
A. Direct Damages
| Category | Description | Amount |
|---|---|---|
| Lost Recovery/Judgment | Value of underlying case lost | $[AMOUNT] |
| Adverse Judgment | Amount of judgment entered against Client | $[AMOUNT] |
| Tax Deficiency | Additional taxes owed due to errors | $[AMOUNT] |
| Penalties | IRS/State/Court penalties | $[AMOUNT] |
| Interest | Interest on deficiencies/judgments | $[AMOUNT] |
| Cost to Correct | Professional fees to fix errors | $[AMOUNT] |
| Settlement Differential | Difference between actual and proper settlement | $[AMOUNT] |
| Subtotal Direct Damages | $[AMOUNT] |
B. Consequential Damages
| Category | Description | Amount |
|---|---|---|
| Business Losses | Lost profits, lost opportunities | $[AMOUNT] |
| Credit Damage | Harm to credit from judgments/liens | $[AMOUNT] |
| Additional Professional Fees | Fees to mitigate your negligence | $[AMOUNT] |
| Lost Interest/Investment Returns | On funds wrongfully lost | $[AMOUNT] |
| Emotional Distress | Anxiety, stress, humiliation | $[AMOUNT] |
| Subtotal Consequential Damages | $[AMOUNT] |
C. Fees Paid/Owed
| Category | Description | Amount |
|---|---|---|
| Fees Already Paid | Fees paid for negligent services | $[AMOUNT] |
| Fee Forfeiture Claim | Fees to be refunded | $[AMOUNT] |
| Retainer Balance | Unearned retainer to be returned | $[AMOUNT] |
| Subtotal Fee Recovery | $[AMOUNT] |
D. Total Damages
| Category | Amount |
|---|---|
| Direct Damages | $[AMOUNT] |
| Consequential Damages | $[AMOUNT] |
| Fee Recovery | $[AMOUNT] |
| Prejudgment Interest | $[AMOUNT] |
| TOTAL DAMAGES | $[AMOUNT] |
VII. LEGAL CLAIMS
Our Client's claims against you include:
A. Professional Negligence/Malpractice
You owed our Client a duty to exercise the knowledge, skill, and ability ordinarily possessed and exercised by members of your profession in similar circumstances. You breached that duty, proximately causing the damages described above.
B. Breach of Fiduciary Duty
As a [licensed professional], you owed our Client fiduciary duties of loyalty, care, and full disclosure. You breached those duties by [DESCRIBE BREACH].
C. Breach of Contract
You entered into an express or implied contract to provide professional services in a competent manner. You breached that contract by [DESCRIBE BREACH].
D. Fraud/Misrepresentation (if applicable)
You made false representations regarding [DESCRIBE], upon which our Client reasonably relied to their detriment.
E. Breach of Statutory Duties
You violated [CITE STATUTE OR RULE], which provides a private right of action for affected parties.
VIII. INSURANCE NOTICE
This letter constitutes notice of a claim that should be reported to your professional liability insurance carrier. Please forward this letter to your carrier immediately and provide us with:
- Name of carrier
- Policy number
- Policy limits
- Claims adjuster contact information
Failure to timely report this claim may jeopardize your coverage.
IX. PRESERVATION OF EVIDENCE
You are hereby directed to preserve all documents and records relating to your representation of our Client, including but not limited to:
☐ Complete client file (paper and electronic)
☐ All correspondence (letters, emails, texts)
☐ All research and work product
☐ Time and billing records
☐ Calendar and deadline tracking records
☐ Notes of meetings, calls, and conferences
☐ All drafts of documents
☐ Trust account records
☐ Conflict check records
☐ Intake forms and engagement materials
☐ Any other documents related to the representation
Do not destroy, alter, or discard any documents. Spoliation of evidence may result in adverse inferences and sanctions.
X. EXPERT CERTIFICATION
[Include if required by state law]
As required by [STATE] law, [CITE STATUTE], we have consulted with a qualified expert who has reviewed the facts of this matter and has opined that your conduct fell below the applicable standard of care and proximately caused damages to our Client.
☐ Expert affidavit/certificate of merit attached
☐ Expert affidavit/certificate of merit to be filed with complaint
XI. DEMAND FOR SETTLEMENT
To resolve this matter without the expense and uncertainty of litigation, we demand payment of $[SETTLEMENT DEMAND] within thirty (30) days of the date of this letter.
This demand represents:
| Category | Amount |
|---|---|
| Direct Damages | $[AMOUNT] |
| Consequential Damages | $[AMOUNT] |
| Fee Disgorgement | $[AMOUNT] |
| Attorney's Fees to Date | $[AMOUNT] |
| Interest | $[AMOUNT] |
| TOTAL DEMAND | $[AMOUNT] |
Alternative Resolutions
We are open to discussing:
☐ Structured settlement
☐ Mediation
☐ Arbitration (non-binding)
☐ Insurance carrier direct negotiation
XII. FEE DISPUTE CONSIDERATIONS
[For legal malpractice claims]
Please be advised that if you claim any portion of fees paid or retainer held, our Client has the right to pursue fee arbitration through the [STATE] Bar Association's fee dispute resolution program. Our Client expressly reserves this right and may pursue fee arbitration concurrent with or in lieu of malpractice claims as permitted by law.
XIII. REPORTING TO LICENSING BOARD
[Optional notice]
Our Client reserves the right to file a complaint with the [STATE BAR / STATE BOARD OF ACCOUNTANCY / OTHER LICENSING BOARD] regarding your conduct. The decision whether to file such a complaint is independent of the resolution of this civil claim.
XIV. RESPONSE DEADLINE
Please respond to this demand in writing within thirty (30) days. Your response should include:
- Acknowledgment of receipt
- Insurance carrier information
- Your position on liability
- Your settlement offer, if any
- Any documents you wish to provide
If we do not receive a satisfactory response, we are authorized to:
- File suit in the appropriate court
- Report the matter to your licensing board
- Pursue all available legal remedies
XV. STATUTE OF LIMITATIONS
For your information, professional malpractice claims in [STATE] are subject to a [NUMBER]-year statute of limitations, running from [discovery of the negligence / occurrence of harm / termination of representation / other trigger]. Our Client's claims are timely.
XVI. RESERVATION OF RIGHTS
This letter is written without prejudice to any and all rights and remedies available to our Client, including but not limited to:
- Claims for additional damages as they become known
- Claims against other professionals who may have contributed to the harm
- Disciplinary complaints
- Fee arbitration
- All other civil and administrative remedies
All rights are expressly reserved.
Respectfully submitted,
[LAW FIRM NAME]
By: _________________________________
[ATTORNEY NAME]
[BAR NUMBER]
[ADDRESS]
[CITY, STATE ZIP]
[TELEPHONE]
[EMAIL]
Attorneys for [CLIENT FULL NAME]
ENCLOSURES:
☐ Copy of engagement letter/agreement
☐ Correspondence regarding negligence
☐ Evidence of damages
☐ Expert report/affidavit (if required)
☐ Authorization to represent
cc: [CLIENT NAME]
[INSURANCE CARRIER]
[CLIENT FILE]
APPENDIX: STATE MALPRACTICE QUICK REFERENCE
| Element | State Requirement |
|---|---|
| Statute of Limitations | [NUMBER] years |
| Accrual Date | [DISCOVERY / OCCURRENCE / OTHER] |
| Expert Affidavit Required | ☐ Yes ☐ No |
| Pre-Suit Mediation Required | ☐ Yes ☐ No |
| Fee Arbitration Available | ☐ Yes ☐ No |
| Punitive Damages Available | ☐ Yes ☐ No |
| Caps on Damages | ☐ Yes: $[AMOUNT] ☐ No |
| Comparative Negligence | ☐ Pure ☐ Modified ([%]) |
This template is for informational purposes only and does not constitute legal advice. Professional malpractice laws vary significantly by state and by profession. Consult a licensed attorney in your jurisdiction before use.