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Analysis: The Tennessee legislature recently passed a
law that now provides a five year statute of repose for any malpractice claims
against accountants or attorneys. The
Tennessee Legislature in the 2014 Tennessee Legislative Session passed Public Chapter No. 618
making this change to existing Tennessee law.
This statute takes effect July 1, 2014 and applies to all acts or omissions
of malpractice by accountants or attorneys that occur on or after July 1,
2014.
T.C.A. § 28-3-104 is modified to add a new
subsection (c). The new subsection in
the statute provides as follows:
(c)(1) Actions and suits against licensed public accountants, certified
public accountants, or attorneys for malpractice shall be commenced within one
(1) year after the cause of action accrued, whether the action or suit is
grounded or based in contract or tort.
(2) In no event shall any action or suit against a licensed public
accountant, certified public accountant or attorney be brought more than five
(5) years after the date on which the act or omission occurred, except where
there is fraudulent concealment on the part of the defendant, in which case the
action or suit shall be commenced within one (1) year after discovery that the
cause of action exists.
As you can see,
there is still a one year statute of limitations for suits against accountants
and attorneys for malpractice from the date the cause of action accrued (the
discovery rule applies in Tennessee to these causes of action so that can
extend the statute of limitations well beyond 1 year from the actual act or omission). However, the new five year statute of repose
is now found in subsection (c)(2) which basically provides that once five years
passes from the date of the act or omission which constituted malpractice, no
claim can be brought against the accountant or attorney.
There is one
exception to this new statute
of repose. That exception is when
there is “fraudulent concealment” by the attorney or accountant. In this situation the claim must be commenced
within one year after the discovery that the cause of action exists.
This new statute of
repose can effectively eliminate many causes of action before the client knows
that such cause of action exists (this is often the case with a statute of
repose). For instance, if an attorney
drafts a will incorrectly and then five years passes before the death occurs,
then nobody will even know of the malpractice before the potential claim is
eliminated by this new statute. My
interpretation of this statute is that once five years passes after the
drafting of wills, contracts or other legal documents, then no cause of action
can be brought against the attorney if the documents are later found to be
faulty. This is a significant new protection
afforded to attorneys in Tennessee, most significantly to those practicing estate planning law.
Follow me on Twitter at @jasonalee for updates from the Tennessee Defense Litigation
blog.
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