With new legislation effective January 2, 2013, the Michigan Legislature retained the two-year statute of limitations and discovery rule applicable to attorney malpractice claims. Under both current and previous law, attorney malpractice claims accrue when the attorney ceases representing the client as to the matter out of which the claim arises. And under both the current and previous regime, the “discovery rule” provides a limited exception to this statute of limitations: a client can bring a malpractice claim within six months after he or she learns of the malpractice or should have learned of it.
Under the new and currently effective law, however, an attorney malpractice claim may not be filed more than six years after the act or omission giving rise to the claim. This six-year statute of repose trumps the statute of limitations and discovery rule and does not depend on when the claim accrues.
Statutes of limitations and statutes of repose
To understand this legislation, it helps to have some background on the difference between a statute of limitation and a statute of repose. As defined by Black’s Law Dictionary, a statute of limitations is “[a] law that bars claims after a specified period.” Similarly, Black’s defines a statute of repose as one “barring any suit that is brought after a specified time since the defendant acted (such as by designing or manufacturing a product), even if this period ends before the plaintiff has suffered a resulting injury.”
Although these statutes sound similar in definition, they are distinct in effect. A statute of limitations only bars an action once it has accrued. A statute of repose, however, can cause an action to be barred before it even accrues.
The new law in application
Michigan’s new legislation shows the critical difference that a statute of repose can make. Suppose an attorney commits malpractice and then retires. Under the old law, the attorney could never be sure that he or she would be immune from malpractice claims. Although these claims were subject to a two-year statute of limitations, the discovery rule meant that a claim could be filed whenever a client discovered (or should have discovered) the malpractice. Thus, under the old law, a former client could bring a malpractice claim eight years after the attorney retired if the client just discovered the malpractice at that time and had no reason to discover it earlier.
Under the new MCL 600.5838b, legal malpractice claims can only be brought within six years after the act or omission giving rise to the claim, regardless whether the claim has accrued (or in other words, regardless whether the attorney-client relationship as to that matter has terminated). Six years after retirement, the attorney can be confident that no malpractice claims will be filed.
Whether courts will apply the new statute of repose retroactively remains to be seen.