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End-of-life notice: American Legal Ethics Library

As of March 1, 2013, the Legal Information Institute is no longer maintaining the information in the American Legal Ethics Library. It is no longer possible for us to maintain it at a level of completeness and accuracy given its staffing needs. It is very possible that we will revive it at a future time. At this point, it is in need of a complete technological renovation and reworking of the "correspondent firm" model which successfully sustained it for many years.

Many people have contributed time and effort to the project over the years, and we would like to thank them. In particular, Roger Cramton and Peter Martin not only conceived ALEL but gave much of their own labor to it. We are also grateful to Brad Wendel for his editorial contributions, to Brian Toohey and all at Jones Day for their efforts, and to all of our correspondents and contributors. Thank you.

We regret any inconvenience.

Some portions of the collection may already be severely out of date, so please be cautious in your use of this material.


South Carolina Legal Ethics

I. CLIENT-LAWYER RELATIONSHIP

1.1   Rule 1.1 Competence

1.1:100   Comparative Analysis of South Carolina Rule

Primary SC References: SC Rule 1.1, See also SC Rule 1.3 (diligence)
Background References: ABA Model Rule 1.1, Other Jurisdictions
Commentary:

1.1:101      Model Rule Comparison

South Carolina Rule 1.1 and its comments are identical to Model Rule 1.1.

1.1:102      Model Code Comparison

The counterpart of Model Rule 1.1 is DR 6-101 of the Code of Professional Responsibility.

1.1:200   Disciplinary Standard of Competence

Primary SC References: SC Rule 1.1
Background References: ABA Model Rule 1.1, Other Jurisdictions
Commentary: ABA/BNA 31:201, ALI-LGL 28, Wolfram 5.1

Although a lack of competence may be addressed more often in civil malpractice actions, a breach of the ethical obligation has been cited with regularity in disciplinary cases, often combined with a finding of neglect. See In re Celso, 330 S.C. 497, 499 S.E.2d 809 (1998) (violation of Rule 1.1 when respondent admitted he was unaware that only person authorized to commence wrongful death action was personal representative of decedent's estate); In re Bedford, 317 S.C. 177, 452 S.E.2d 605 (1995) (lawyer drafted deed with inaccurate description and closed property transaction under power of attorney that did not apply to property involved); In re Warder, 316 S.C. 249, 449 S.E.2d 489 (1994) (in addition to not advising client of court dates, lawyer provided inaccurate advice).

Lack of competence in representation is often coupled with other violations, typically failure to communicate with the client. See In re Perkins, 334 S.C. 639, 515 S.E.2d 96 (1999) (failure to diligently pursue number of matters and failure to respond to client requests for information).

1.1:300   Malpractice Liability

Primary SC References: SC Rule 1.1
Background References: ABA Model Rule 1.1, Other Jurisdictions
Commentary: ABA/BNA 301:101, ALI-LGL 71-76 , Wolfram 5.6

1.1:310      Relevance of Ethics Codes in Malpractice Actions

In Smith v. Haynsworth, Marion, McKay & Geurard, 322 S.C. 433, 472 S.E.2d 612 (1996), the Supreme Court held that violation of the rules of professional conduct was not per se malpractice, but experts could rely upon the rules in expressing opinions about whether a lawyer accused of malpractice had violated the standard of care required of lawyers. The court also ruled, however, that not all rules of ethics are relevant:

This is not to say, however, that all of the Bar Rules would necessarily be relevant in every legal malpractice action. In order to relate to the standard of care in a particular case, we hold that a Bar Rule must be intended to protect a person in the plaintiff's position or be addressed to the particular harm.

Id. at 437, 472 S.E.2d at 614 (quoting Allen v. Lefkoff, Duncan, Grimes & Dermer, 265 Ga. 374, 453 S.E.2d 719, 721-722 (1995)). Violation of a rule of professional conduct "is merely a circumstance that, along with other facts and circumstances, may be considered in determining whether the attorney acted with reasonable care." McNair v. Rainsford, 330 S.C. 332, 343, 499 S.E.2d 488, 494 (Ct. App. 1998).

1.1:320      Duty to Client

The elements of a legal malpractice action in South Carolina are: (1) the existence of an attorney-client relationship; (2) breach of a duty by the attorney; (3) damage to the client; and (4) proximate causation of the client's damages by the breach. McNair v. Rainsford, 330 S.C. 332, 499 S.E.2d 488 (Ct. App. 1998).

To establish a claim for legal malpractice, the plaintiff must prove that a client-attorney relationship existed. American Federal Bank, FSB v. Number One Main Joint Venture, 321 S.C. 169, 467 S.E.2d 439 (1996), was an action by a bank on a promissory note, brought against all investors in a joint venture. One of the investors filed a counterclaim against the closing attorney for malpractice. The Supreme Court affirmed the trial court's order dismissing the claim against the attorney on the ground that no client-attorney relationship existed between the attorney and investor. The attorney represented the joint venture at the closing, and the investor was represented by his own counsel.

In Crowley v. Harvey & Battey, 327 S.C. 68, 488 S.E.2d 334 (1997), the Supreme Court dealt with the distinction between an attorney's liability for negligence and liability for violation of the attorney's fiduciary duties as an agent in connection with settlement agreements. If the client alleges that the attorney exceeded his authority in settling the case, the client's acceptance of benefits of the settlement amounts to a ratification of the attorney's acts. When a client alleges that his former attorney was negligent in advising him to accept a settlement, however, that alleged negligence is a matter left for a malpractice suit even if the client accepts the benefits of the settlement.

1.1:330      Standard of Care

In Norris v. Alexander, 246 S.C. 14, 142 S.E.2d 214 (1965), Alexander accepted $200 to procure a divorce for Norris and later admitted that he did not render adequate services to Norris for the money which Norris paid. The court concluded that Alexander committed misconduct, and in determining what sanction to issue, the court noted:

An attorney, who contracts to prosecute an action on behalf of his client, impliedly represents that he possesses the requisite degree of learning, skill and ability, which is necessary to the practice of his profession; that he will exert his best judgment in the prosecution of the litigation entrusted to him; and that he will exercise reasonable and ordinary care and diligence in the use of his skill and in the application of his knowledge to the cause of his client.

246 S.C. at 18, 142 S.E.2d at 217. The court has subsequently cited this standard in legal malpractice cases.

1.1:335      Requirement of Expert Testimony

Expert testimony is generally required to establish the standard of care in a legal malpractice action. See McNair v. Rainsford, 330 S.C. 332, 499 S.E.2d 488 (Ct. App. 1998). In Mali v. Odom, 295 S.C. 78, 367 S.E.2d 166 (Ct. App. 1998), the Court of Appeals recognized two exceptions to the requirement of expert testimony: when the subject matter is of common knowledge to layperson and when the defendant's own testimony establishes the standard of care. Id. at 80-81, 367 S.E.2d at 168.

1.1:340      Causation and Damages

In McNair v. Rainsford, 330 S.C. 332, 499 S.E.2d 488 (Ct. App. 1998), an action by a seller of property for legal malpractice, the Court of Appeals stated that the following principles of causation govern legal malpractice actions:

In a negligence action, the plaintiff must prove proximate cause. Vinson v. Hartley, 324 S.C. 389, 477 S.E.2d 715 (Ct. App.1996). Negligence is not actionable unless it is a proximate cause of the injury. Id. Proof of proximate cause requires proof of both causation in fact and legal cause. Id. Causation in fact is proved by establishing the injury would not have occurred "but for" the defendant's negligence. Id. Legal cause is proved by establishing foreseeability. Id. A plaintiff therefore proves legal cause by establishing the injury in question occurred as a natural and probable consequence of the defendant's negligence. Id.

Proximate cause is the efficient or direct cause of an injury. Id. Negligence is deemed to be the proximate cause of an injury when, without such negligence, the injury would not have occurred or could have been avoided. Id. Ordinarily, the question of proximate cause is one of fact for the jury and the trial judge's sole function regarding the issue is to inquire whether particular conclusions are the only reasonable inferences that can be drawn from the evidence. Id.

330 S.C. at 349, 499 S.E.2d at 497.

In cases alleging malpractice against criminal defense counsel, the court has held that the guilt or innocence of the defendant and the extent of post-conviction relief proceedings may be considered by the trial court in determining proximate cause. Brown v. Theos, 1999 WL 1220012 (Ct. App. 1999).

1.1:350      Waiver of Prospective Liability [see 1.8:910]

[The discussion of this topic has not yet been written.]

1.1:360      Settlement of Client's Malpractice Claim [see 1.8:920]

[The discussion of this topic has not yet been written.]

1.1:370      Defenses to Malpractice Claim

The statute of limitations for attorney negligence actions in South Carolina is three years. S.C. Code Ann. 15-3-530(5). In True v. Monteith, 327 S.C. 116, 489 S.E.2d 615 (1997), Monteith represented True in 1973 in executing a long-term lease agreement with Edens. Monteith failed to disclose to True that he also represented Edens in the transaction and had a business relationship with Edens. Before executing the lease, True questioned the absence of a cost-of-living clause for future payments. In May 1990 True discovered the relationship between Monteith and Edens. In February 1993 True filed suit for legal malpractice against Monteith. Monteith raised the statute of limitations as a defense. The court stated that the "discovery rule" governed when the statute of limitations began to run in legal malpractice actions. The court ruled that summary judgment for Monteith was inappropriate because questions of fact existed about when Monteith's failure to disclose his relationship with Edens was reasonably discoverable. The court also held that True"s knowledge of the injury (the absence of the cost-of-living clause) would not necessarily provide her with notice of a malpractice claim.

1.1:380      Liability to Client for Breach of Contract, Breach of Fiduciary Duty, and Other Liabilities

In Holy Loch Distributors v. Hitchcock, 2000 WL 313305 (2000), foreign plaintiffs brought an action against attorneys for failing to procure appropriate visas, licenses, and permits to enable the plaintiff's business to lawfully sell beer in South Carolina. One attorney repeatedly assured the clients that they would be able to obtain necessary federal permits. Ultimately the permits were denied. Plaintiffs sued for professional negligence, breach of fiduciary duty, breach of contract, and breach of warranty. The Court of Appeals held a client could sue an attorney for breach of express warranty, but the Supreme Court reversed. The court refused to recognize a cause of action for breach of express warranty in rendering professional services, concluding that establishment of such a cause of action was unnecessary because "current attorney malpractice rules are adequate to provide a basis of recovery." Id. at *3. In addition, "[a]n express warranty cause of action would also adversely affect the attorney-client relationship by inhibiting the frank discussion between attorney and client concerning the merits of the case." Id. at *4. The court distinguished prior cases in which professionals had been held liable for breach of express warranty because in those cases a "product or some other tangible item" was involved. Id.

In Hotz v. Minyard, 304 S.C. 225, 403 S.E.2d 634 (1991), a lawyer represented a client in the preparation and execution of his will. The lawyer had an ongoing attorney-client relationship with the client's daughter in other legal matters, but did not represent the daughter in connection with the father's will. The lawyer had no duty to disclose the contents of the father's will to the daughter. Nevertheless, by virtue of the ongoing relationship, the lawyer owed a duty to the daughter "to deal with her in good faith and not actively misrepresent" to her the contents of the father's estate plan. The lawyer had showed the daughter a copy of a prior will that she allegedly understood to be the father's latest will. The case was remanded for trial on the question of whether a breach of fiduciary duty actually had occurred. See John Freeman, Ethics and Fiduciary Duty, S.C. LAW., Sept.-Oct. 1998, at 11 (discussing lawsuits against attorneys for breach of fiduciary duty).

1.1:390      Liability When Non-Lawyer Would Be Liable

[The discussion of this topic has not yet been written.]

1.1:400   Liability to Certain Non-Clients

Primary SC References: SC Rule 1.1
Background References: ABA Model Rule 1.1, Other Jurisdictions
Commentary: ABA/BNA 71:1101, ALI-LGL 73, Wolfram 5.6

1.1:410      Duty of Care to Certain Non-Clients

Generally lawyers are not legally liable to third parties for the performance of professional duties owed to their clients. See Douglass ex rel. Louthian v. Boyce, 336 S.C. 318, 326, 519 S.E.2d 802, 806 (Ct. App. 1999).

Although authority is scarce in South Carolina, it appears that a lack of privity will not prevent a finding that a lawyer may owe duties of care to nonclients who are invited to rely upon the lawyer's opinion or to nonclients who are the intended beneficiaries of the lawyer's services to a client. In Tommy L. Griffin Plumbing & Heating Co. v. Jordan, Jones & Goulding, Inc., 320 S.C. 49, 463 S.E.2d 85 (1995), the court noted that, although in many professional malpractice cases the defendant "lawyer or the accountant will be in privity of contract with the plaintiff[,] [t]hese professionals . . . owe a duty to the client and sometimes to third parties which arises separate and distinct from the contract for services." Id. at 55, 463 S.E.2d at 89. In that case, the court allowed a contractor to bring an action for negligence against an engineer who had designed a project for the owner. Where the engineer had designed and supervised the project, he owed a duty to the contractor not to act negligently, notwithstanding a lack of contractual privity. See Rule 2.3, cmt. (noting that when an evaluation prepared by a lawyer is intended for the use of a person other than the client, "a legal duty to that person may or may not arise"). See also Lloyd v. Walters, 276 S.C. 223, 277 S.E.2d 888 (1981) (lawyer who certified that corporate officer had authority to sell property and disburse proceeds may be liable to plaintiff who had interest in property for negligence). For a discussion of whether a lawyer who is the attorney for a fiduciary may owe duties in certain circumstances to those on whose behalf the fiduciary-client is supposed to be acting, see 1.1:440. A lawyer may owe a duty of confidentiality to a person who has sought the lawyer's services, even though an attorney-client relationship is never created. ABA Formal Op. # 90-358.

When an attorney engages in an intentional tort such as fraud, conspiracy, or conversion the lawyer may be liable to third persons. See Stiles v. Onorato, 318 S.C. 297, 299-300, 457 S.E.2d 601, 602 (1995) (citing with approval cases from other jurisdictions).

1.1:420      Reliance on Lawyer's Opinion [see also 2.3:300]

[The discussion of this topic has not yet been written.]

1.1:430      Assisting Unlawful Conduct [see also 1.2:600-1.2:630]

Lawyers have been disciplined for aiding or abetting unlawful conduct. See In re Hipp, 328 S.C. 126, 492 S.E.2d 102 (1997). South Carolina appears to recognize a cause of action under section 876(b) of the Restatement (Second) of Torts for aiding and abetting a breach of fiduciary duty. Future Group, II v. Nationsbank, 324 S.C. 89, 478 S.E.2d 45 (1996) (recognizing cause of action but finding defendant bank not liable because it did not have actual knowledge of breach of duty).

1.1:440   Knowledge of Client's Breach of a Fiduciary Duty [see also 1.13:520]

There is no case law in South Carolina directly addressing whether a lawyer for a fiduciary may have a duty to disclose information to a nonclient beneficiary. The comment to Rule 1.2 prohibits a lawyer from assisting a client in fraudulent conduct, but does not set forth any explicit duty to disclose such conduct by a fiduciary. In Hotz v. Minyard, 304 S.C. 225, 403 S.E.2d 634 (1991), a prospective devisee asked her father's lawyer for a copy of the father's will. The father, who was still alive and had led the daughter to believe that the disposition of his estate would differ from the plan actually set forth in his will, had instructed the lawyer not to inform his daughter of the will's contents. The lawyer showed the daughter an earlier draft of the will, knowing it had been materially revised. The trial court granted summary judgment to the lawyer on a breach of fiduciary duty claim, finding that the lawyer had not also represented the daughter and, thus, owed her no fiduciary duty. The Supreme Court reversed. Because of other professional contacts with the daughter, the lawyer had also represented the daughter and, thus, may have breached a fiduciary duty by misleading her as to the contents of her father's will. The court added, however, that, while the lawyer had a duty not to mislead the daughter, he had no duty to disclose to her the existence of the actual will against the wishes of the father. See John Freeman, Ethics and Fiduciary Duty, S.C. LAW., Sept.-Oct. 1998, at 11 (suggesting that lawyer may owe fiduciary duty to person other than client, based upon language in Hotz that lawyer did not represent daughter in connection with father's will, but that she had reposed "special confidence" in lawyer, sufficient to create fiduciary duty to her on part of lawyer).

A section of the probate code precludes any presumption that, by representing the fiduciary, a lawyer also automatically represents the beneficiaries of a trust or estate. The mere fact that a lawyer represents a fiduciary "shall not impose upon the lawyer any duties or obligations to other persons interested in the estate, trust estate, or other fiduciary property." S.C. Code Ann. 62-1-109. This section, however, does not preclude a finding that other facts and circumstances might establish an attorney-client relationship with a beneficiary. For example, if the lawyer has advised the beneficiary, a joint representation may be found to exist.

1.1:450      Failing to Prevent Death or Bodily Injury

[The discussion of this topic has not yet been written.]

1.1:500   Defenses and Exceptions to Liability

Primary SC References: SC Rule 1.1
Background References: ABA Model Rule 1.1, Other Jurisdictions
Commentary: ABA/BNA 301:1001, ALI-LGL 76, 78, Wolfram 5.6

1.1:510      Advocate's Defamation Privilege

Both parties and attorneys have an absolute privilege to publish defamatory matter in pleadings if the matter contained is relevant and pertinent to matters of the case. In Texas Co. v. C.W. Brewer & Co., 180 S.C. 325, 185 S.E. 623 (1936), plaintiff brought an action against defendant for money had and received, alleging that "plaintiff is informed by the said C.W. Brewer that he paid the account to T.W. Brunson, the defendant herein, and that the said T.W. Brunson was the unauthorized agent of the plaintiff and had no authority to collect the same." The defendant denied the allegations, claimed that plaintiff's action was "maliciously instituted," and argued that the statement in plaintiff's complaint concerning T.W. Brunson "was not pertinent, relevant, or necessary, and was false and libelous and intended to hold the defendant up to public ridicule and scorn." Id. at 326-27, 185 S.E. at 23. The lower court held that the statement was privileged because it was contained in a court pleading, and the South Carolina Supreme Court affirmed.

Defamatory statements made in the course of a judicial proceeding, as long as the statements are relevant to the issues of the proceeding, are also absolutely privileged. Corbin v. Washington Fire & Marine Ins. Co., 278 F. Supp. 393 (D.S.C. 1968). This privilege attaches to communications between counsel, statements made by counsel to prospective witnesses, arguments or statements by counsel in course of the proceeding, and to any statements made in the course of negotiation of a settlement or at an arbitration proceeding. Id.

However, this absolute privilege may not extend to information voluntarily divulged to a reporter outside of court. See John Freeman, Speak No Evil, S.C. LAW., Mar.-Apr. 2000, at 10. Freeman comments on Kennedy v. Zimmerman, 601 N.W.2d 61 (Iowa 1999), a recent case facing such an issue. In Kennedy, an attorney communicated a defamatory statement about a pending case to a newspaper reporter, and the statement was later published in the newspaper; the court held that the statement was not insulated by the absolute privilege granted to attorneys for statements made in the course of judicial proceedings, and the court found the attorney liable for defamation. Id. Whether or not South Carolina will follow suit remains to be seen; "[o]ne possible loophole that could be used to protect lawyers extrajudicial comments about their cases is the 'fair report privilege,'" which grants a qualified privilege to fair and impartial reports in newspapers of matters of public interest. Id. at 13. Although Iowa did not recognize such a privilege in the Kennedy case, "South Carolina may be more hospitable." Id.

1.1:520      Wrongful Use of Civil Proceedings; Abuse of Process; False Arrest

In Gaar v. North Myrtle Beach Realty Co., 287 S.C. 525, 339 S.E.2d 887 (Ct. App. 1986), two attorneys for North Myrtle Beach Realty brought an action for damages in quantum meruit against the Gaars. The trial judge granted the Gaar's motion for a voluntary nonsuit, stating that the realty company had no cause of action against the Gaars. The Gaars subsequently sued the two attorneys for malicious prosecution. The South Carolina Court of Appeals set forth a six-part test for for establishing malicious prosecution, but held that "an attorney is immune from liability to third persons arising from the performance of his professional activities as an attorney on behalf of and with the knowledge of his client. Accordingly, an attorney who acts in good faith with the authority of his client is not liable to a third party in an action for malicious prosecution." Id. at 528-29, 339 S.E.2d at 889. The court also stated that "[e]ven if the attorney who initiates civil proceedings for his client has no probable cause to do so, he is still not liable if he acts primarily for the purpose of aiding his client in obtaining a proper adjudication of the client's claim." Id. The court stated a number of reasons supporting this rule. First of all, attorneys must be free to advise their clients without the threat of harassment from lawsuits. Furthermore, since an attorney is liable to his client for not zealously representing him, holding an attorney liable for malicious prosecution may create a conflict of interest with the attorney's obligation to his client. Also, holding an attorney liable for malicious prosecution might hinder the development of new legal theories.

Sometimes confused with malicious prosecution, an action for abuse of process exists:

The essential elements of abuse of process, as the tort has developed, have been stated to be: first, an ulterior purpose, and second, a wilful act in the use of the process not proper in the regular conduct of the proceeding. Some definite act or threat not authorized by the process, or aimed at an objective not legitimate in the use of the process, is required; and there is no liability where the defendant has done nothing more than carry out the process to its authorized conclusion, even though with bad intentions . . . . [T]he distinction between an action for malicious prosecution and one for abuse of process is "that a malicious prosecution consists in maliciously causing process to be issued, whereas an abuse of process is the employment of legal process for some purpose other than that which it was intended by the law to effect"

Huggins v. Winn-Dixie Greenville, Inc., 249 S.C. 206, 153 S.E.2d 693 (1967) (quoting 34 Am. Jur., Malicious Prosecution 704).

In Rycroft v. Gaddy, 281 S.C. 119, 314 S.E.2d 39 (Ct. App. 1984) Rycroft brought an action against Gaddy for abuse of process. The action arose out of an earlier lawsuit between Rycroft and Tanguay, who were equal shareholders in a corporation, when Rycroft sued Tanguay for dissolution of the corporation. Gaddy represented Tanguay. A day before litigation commenced, Gaddy realized that Rycroft had used C & S bank as a depositary for certain checks, and subpoenaed C & S bank records. Rycroft sued Gaddy, claiming the issuance of the subpoena was an abuse of process. The court held that "Rycroft's bank records were subpoenaed for an entirely legitimate purposem -- to be used as evidence by Gaddy in the prosecution of his client's action. The subpoena was not used as a form of coercion to obtain a collateral advantage or as a form of extortion." Id. at 125, 314 S.E.2d at 44. Thus, the court failed to find attorney Gaddy liable for abuse of process since his actions lacked an ulterior purpose.

Courts are more willing to recognize a cause of action against an attorney for abuse of process than for malicious prosecution. Compare Gaar, 287 S.C at 525, 339 S.E.2d at 887 (discussed supra) with Johnson v. Painter, 279 S.C. 390, 307 S.E.2d 860 (recognizing claim for abuse of process against attorney but holding that fact of cases did not support such claim) and Rycroft, 281 S.C. at 119, 314 S.E.2d at 39 (discussed supra).

1.1:530      Assisting Client to Break a Contract

[The discussion of this topic has not yet been written.]

1.1:600   Vicarious Liability [see 5.1:500]

Primary SC References: SC Rule 1.1
Background References: ABA Model Rule 1.1, Other Jurisdictions
Commentary: ABA/BNA 91:201, ALI-LGL 79, Wolfram 5.6

Traditionally, lawyers have practiced in general partnerships. Under partnership law general partners are jointly and severally liable for debt or liability chargeable to the partnership. See S.C. Code Ann. 33-41-370.

South Carolina law also recognizes professional corporations (PCs), limited liability partnerships (LLPs), and limited liability companies (LLCs). See S.C. Code Ann. 33-19-101 et seq. (PCs); 33-41-1110 et seq. (LLPs); and 33-44-101 et seq. (LLCs). Both the Professional Corporation Supplement and the Limited Liability Partnership act expressly authorize professionals to use these forms of business organization. The 1996 LLC Act does not expressly provide for professional services, although its predecessor did. See Martin C. McWilliams, Jr., Limited Liability Law Practice, 49 S.C. L. Rev. 359, 359 n.5 (1998).

Lawyers who practice in PCs, LLPs, or LLCs are personally responsible for their own misconduct. See S.C. Code Ann. 33-19-340(a) (PC); 33-41-370(D) (LLP); 33-44-303 and comment (LLC). The statutes also provide that the entity is liable for the actions of an employee, partner, or member that are authorized or committed in the scope of the employee's, partner's or member's employment. See S.C. Code Ann. 33-19-340(b) (PC); 33-41-350 (LLP); 33-44-302 (LLC). See Hotz v. Minyard, 304 S.C. 225, 403 S.E.2d 634 (1991) (law firm may be vicariously liable for breach of fiduciary duty committed by lawyer).

The PC and LLPs statutes provide professionals with a limited degree of immunity from vicarious liability. An employee or partner is not liable for the misconduct of another employee or partner unless the employee or partner was "at fault in appointing, supervising, or cooperating" with the wrongdoer. S.C. Code Ann. 33-19-340(a) (PC); 33-41-370(D) (LLP). The LLC statute is somewhat unclear on the scope of degree of immunity from vicarious liability available to professionals, but it would probably be construed to parallel the PC and LLP statutes. See S.C. Code Ann. 33-44-303.

Despite the existence of these statutes, the South Carolina Supreme Court retains the power to regulate the practice of law. The court has not addressed the question of whether the limitation of liability found in the PC, LLP, and LLC statutes is permissible, although the neighboring state of Georgia has upheld such a provision. See Henderson v. HSI Financial Servs., Inc., 471 S.E.2d 885 (Ga. 1996) (while court reserves right to regulate practice of law, lawyers may practice in professional corporations and receive same statutory benefits as other professionals, including limited liability for misconduct committed by other lawyers in firm in which lawyer was not personally involved), overruling First Bank & Trust Co. v. Zagoria, 302 S.E.2d 674 (Ga. 1983) (attorneys may practice in professional corporations, but they remain vicariously liable for misconduct of other lawyers practicing in firm).