As you probably know, if a legal malpractice claim is based on alleged negligent conduct in handling a litigation, the plaintiff has to argue that he/she would have won the original case had it not been for the negligent conduct of the defendant. But what if the plaintiff does not show that he or she would have been able to actually recover compensation from the original defendant?
Addressing this issue for the first time in the jurisdiction, four days ago, the Washington State Supreme Court issued an opinion in a case called Schmidt v. Coogan, holding that the uncollectibility of the judgment in the underlying action is an affirmative defense that the defendant attorney must plead and prove.
In other words, in the malpractice case against the attorney, the plaintiff only has to argue that he or she would have won the original case. The plaintiff will not have to show he or she would have been able to recover the compensation. The defendant lawyer can, however, bring up the issue as a defense.
You can read the opinion here.
UPDATE (10/22/14): As reported in the BNA/ABA Lawyer's Manual on Professional Conduct:
The Schmidt court acknowledged that it was departing from the majority view in holding that the uncollectibility of an underlying judgment is an affirmative defense that a malpractice defendant must prove, rather than holding that collectibility is an element the plaintiff must established as part of her prima facie case The lead opinion identifies Georgia, Iowa, Massachusetts and Nebraska as adhering to the traditional rule. See McDow v. Dixon, 226 S.E.2d 145 (Ga. 1976); Whiteaker v. State, 382 N.W.2d 112 (Iowa 1986); Jernigan v. Giard, 500 N.E.2d 806 (Mass. 1986); Eno v. Watkins, 429 N.W.2d 371 (Neb. 1988).
California and Ohio courts also take that view. See Garretson v. Miller, 121 Cal. Rptr.2d 317, 18 Law. Man. Prof. Conduct 421 (Cal. Ct. App. 2002); Paterek v. Petersen & Ibold, 890 N.E.2d 316, 24 Law. Man. Prof. Conduct 315 (Ohio 2008).
States that depart from the traditional view include Alaska, Indiana, Maine, Michigan, New Jersey, New Hampshire, New York and Pennsylvania. See Power Constructors, Inc. v. Taylor & Hintze, 960 P.2d 20 (Alaska 1998); Clary v. Lite Machines Corp., 850 N.E.2d 423 (Ind. Ct. App. 2006); Jourdain v. Dineen, 527 A.2d 1304 (Me. 1987); Teodorescu v. Bushnell, Gage, Reizen & Byington, 506 N.W.2d 275 (Mich. 1993); Hoppe v. Ranzini, 385 A.2d 913 (N.J. 1978); Carbone v. Tierney, 864 A.2d 308, 20 Law. Man. Prof. Conduct 442 (N.H. 2004); Kituskie v. Corbman, 714 A.2d 1027 (Pa. 1998); Lindenman v. Kreitzer, 775 N.Y.S.2d 4, 20 Law. Man. Prof. Conduct 192 (N.Y. App. Div. 2004).
See also Akin, Gump, Strauss, Hauer & Feld, LLP v. Nat'l Dev. & Research Corp., 299 S.W.3d 106, 25 Law. Man. Prof. Conduct 617 (Tex. 2010) (evidence that underlying damages “probably would have been paid” despite debtor's insolvency would be enough); Visvardis v. Eric P. Ferleger P.C., 873 N.E.2d 436, 23 Law. Man. Prof. Conduct 427 (Ill. App. Ct. 2007) (plaintiff must plead facts supporting inference that opponent in underlying case would have been able to pay some part of damages).