Legislature clarifies statute on third-party legal-mal suits

A pair of companion bills addressing limitations for third-party legal malpractice claims in estate planning have passed unanimously through the General Assembly.

The bills, Senate Bill 1115 and House Bill 2174, now await the signature of Gov. Glenn Youngkin.

The bills provide that an estate planning attorney does not owe a legal duty to anyone besides the client unless the attorney and client enter into a written agreement expressly allowing for an extension of that duty. The bills further repeal the provision specifying the statute of limitations for legal malpractice actions stemming from contracts for legal services concerning estate planning.

The Legislature’s actions on the issue of third-party legal malpractice suits further clarifies a 2017 code enacted by the General Assembly to limit such claims.

Under the 2025 bills, the statute would be amended to merely state that “an attorney does not owe a legal duty to any person other than the client in any engagement for the purpose of the client’s estate planning” unless there is a signed, written agreement between the lawyer and client “that expressly provides that the client and attorney intend to confer a benefit upon a third party by specific reference to this subsection.”

“[The bill] provides technical fixes to better reflect the General Assembly’s intention in 2017 in limiting the ability of third parties to claim malpractice by someone else’s lawyer,” Del. Nadarius Clark, D-Suffolk, said before the House of Delegates Courts of Justice Civil Subcommittee on Jan. 20.

Clark patroned HB 2174, while Sen. Glen Sturtevant, R-Midlothian, patroned SB 1115.

Supreme Court decision

The catalyst for the Legislature’s actions on the issue of third-party legal malpractice claims was the Supreme Court of Virginia’s 2016 decision in Thorsen v. Richmond SPCA.

In Thorsen, a woman hired an attorney to prepare her last will and testament, seeking to leave her estate to the Richmond Society for the Prevention of Cruelty to Animals.

Upon the woman’s death, a dispute arose over the assets the Richmond SPCA was entitled to under the agreement. It filed suit against the attorney for breach of contract-professional negligence as a third-party beneficiary of the contract between the deceased woman and her lawyer.

This bill attempts to make [it] clearer that, in fact, an attorney does not owe a legal duty to any person other than the client for whom they are engaged to prepare the will.

— Sen. Glen Sturtevant, bill sponsor

The Supreme Court of Virginia ruled in favor of the Richmond SPCA, holding the SPCA “had the authority to proceed under common law as a third-party beneficiary of an oral contract.”

The court further held that the three-year statute of limitations to file such actions begins to run at the death of the testator, not when the agreement is first signed.

“While, as a general rule, strangers to a contract acquire no rights under such contract, third-party beneficiary contracts represent a well-recognized exception in our law under which a nonparty can nevertheless enforce the contract under certain circumstances,” Senior Justice Leroy F. Millette Jr. wrote in Thorsen.

The court upheld the Richmond Circuit Court’s award of more than $600,000 in damages to the Richmond SPCA, as it “was a clearly and definitely identified third-party beneficiary of the contract.”

In pitching SB 1115 to the Senate Courts of Justice Committee in January, Sturtevant referenced the Thorsen decision.

“In 2016, there was a Virginia Supreme Court opinion that essentially created a new cause of action for attorney malpractice where a third-party beneficiary of a will would be allowed to sue the attorney drafter of the will instrument,” Sturtevant said.

Legislative action

In 2017, the General Assembly passed Va. Code § 64.2-520.1 at the recommendation of the Virginia Bar Association Wills, Trusts and Estates Section’s Legislative Committee. The passage added a new paragraph explicitly stating that “the action may be maintained only by the individual or by the individual’s personal representative” unless there is a written agreement “between the individual and defendant that expressly grants standing to a person who is not a party to the representation by specific reference to this subsection.”

However, Sturtevant said the statute as written “perhaps doesn’t cover the waterfront in that area,” citing review of the statute by the Boyd-Graves Conference, an invitation-only group of judges, law professors and attorneys who review statutory questions and recommend changes to Virginia law.

“This bill attempts to make [it] clearer that, in fact, an attorney does not owe a legal duty to any person other than the client for whom they are engaged to prepare the will,” Sturtevant told the Courts of Justice Committee.

SB 1115 and HB 2174 were recommendations of the Boyd-Graves Conference. Members of the Boyd-Graves Conference declined to comment for this story, referring Virginia Lawyers Weekly to the conference’s report.

In the report, McLean attorney Matthew Lee wrote in a memorandum that he has represented hundreds of attorneys in professional liability lawsuits, including wills, trusts and estates attorneys.

“Up until recently, the exposure to liability for those attorneys was generally limited,” Lee wrote. “We are, however, beginning to see more claims against T&E attorneys, especially since the Thorsen decision and resulting legislative enactment, in 2017, of Va. Code § 64.2-520.1.”

Lee’s memo referenced the 2017 statute, writing that if the General Assembly’s intent was that the statute “overrule Thorsen, then the words they chose to use do not convey such an intent.” Lee later wrote that the wording of the statute speaks “to a client’s legal malpractice claim, not a claim by an intended third-party beneficiary.”

He added that the main holding in Thorsen, “along with additional aspects of the decision, not surprisingly, created a shock wave in the trusts and estates bar, as well as legal malpractice insurance carriers.”

Lee concluded the memo by stating that although the code was meant to make enforcing Thorsen-type liability nearly impossible without written agreement, the statute’s wording does not provide that.

“Therefore, I fear that a clever and experienced professional liability attorney out there may convincingly argue that the statute does not abrogate the common law’s intended third-party beneficiary’s claim and in so doing, that Thorsen remains good law to this day,” Lee wrote.

The Boyd-Graves study committee agreed, unanimously recommending approval of the proposed legislation to provide clarity on the issue.

“By this language and the enactment of new Virginia Code § 64.2-520.1 the General Assembly clearly intended to foreclose any third-party beneficiary claim arising from the legal malpractice of the drafting attorney unless such a claim was expressly provided for in a written agreement between the deceased testator and the attorney,” the report states.

HB 2174 and SB 1115 faced no opposition, clearing each chamber unanimously and with little to no debate, with final passage of both bills ultimately coming via the unanimous passage of blocks of uncontested bills.

Richmond attorney Katherine Ramsey chaired the VBA Wills, Trusts and Estates subcommittee that worked on the 2017 bill. She told Virginia Lawyers Weekly that the main takeaway of the bills is that state law remains unchanged.

“The bill does not change current Virginia law, which provides that the intended beneficiaries of an estate plan do not have standing to bring a malpractice suit against the drafting attorney unless the attorney and client expressly agreed in writing otherwise,” Ramsey said. “It will be an unusual situation, though, where that is done, because it could put the attorney in a situation where he or she has potentially conflicting duties.”

Virginia Beach attorney Glen Robertson echoed Ramsey’s takeaway that the legislation “is declarative of existing law.”

“I have not experienced nor heard of any occasions where the post-Thorsen code provision has failed to accomplish the limitations it intended, but perhaps Boyd-Graves members have,” Robertson said.