Their side was inadequately prepared for questioning during arbitration, clients allege
Two brothers have filed lawsuits against the U.S. firm Bradley Arant Boult Cummings LLP and one of its former partners. They alleged that the defendants were liable for a highly unfavourable outcome in a 2018 arbitration.
The lawsuits – filed in the U.S. District Court for the Northern District of California last Aug. 28 – alleged legal malpractice, breach of fiduciary duty, breach of contract, and professional negligence. According to the complaints, the firm’s mishandling of the arbitration process led to a disastrous outcome for the brothers.
The claims stemmed from a 2018 arbitration involving the brothers' consulting companies and two Native American tribal lenders. The firm’s legal team, led by the individual defendant, failed to adequately prepare for the arbitration, alleged the plaintiffs.
The plaintiffs claimed that the firm pushed for an expedited arbitration schedule that did not allow enough time for proper preparation, including conducting necessary discovery, taking depositions, and retaining expert witnesses.
The firm advised the plaintiffs to reject a US$2.5 million settlement offer from the lenders before the arbitration, one brother claimed in his lawsuit. The firm based this advice on an overconfident but unfounded assessment of their legal position, the other brother said in his filing.
The plaintiffs claimed that, during the arbitration, their side was inadequately prepared for questioning. The firm allegedly failed to properly object to damaging evidence presented by the opposing side and failed to hire the experts needed to counter certain financial claims.
The plaintiffs asserted that the firm’s negligent advice and poor representation led directly to the inflated damages awarded by the arbitrator. They claimed that the firm’s failure to challenge the damages calculation or to present adequate counter-evidence resulted in a grossly disproportionate financial penalty.
The plaintiffs alleged that the firm’s legal team made numerous missteps, including consolidating the arbitration claims of two businesses that had distinct operations and that had contracts with different tribal entities. This decision allegedly caused unnecessary confusion and further harmed the plaintiffs’ legal position.
After the arbitration, the lenders sought to enforce the judgment in the California Superior Court in Humboldt County, which led to additional litigation, the plaintiffs noted.
