There has been a recent development in Tennessee law (Tenn. Code Annotated, Title 28, Chapter 3) effecting legal and accounting malpractice cases filed after July 1, 2014. Specifically, on July 1, 2014, a new statute of repose begins for actions alleging errors and omissions filed against lawyers and accountants in Tennessee. This new statute of repose requires that actions be brought no more than five years after the date on which the act or omission occurred, regardless of when the injury is discovered. This statute of repose will not apply to cases where there is fraudulent concealment on the part of the defendant, in which case the action or suit must be commenced within one year after discovery that the cause of action exists.
The applicable statute of limitations remains unchanged and requires that and cases alleging legal or accounting malpractice, regardless if they are based in contract or tort, must be brought within one year after the cause of the action accrued. When an action “accrues” may be a different date than when the act or omission giving rise to the suit occurred. For example, a defendant may have committed malpractice on January 1, 2013, but the cause of action may not be considered to begin to accrue until the plaintiff knows or in the exercise of reasonable care and diligence should know that an injury has been sustained as a result of wrongful or tortious conduct, which may be at a much later date than the January 1, 2013, date of the conduct that constituted malpractice. Historically, the date on which the cause of action “accrues” has been an issue in some instances that ultimately requires court interpretation.
This change in the law will not affect cases that have already been filed; however, it will help limit exposure for cases filed after July 1, 2014.