A.R.S. 12-542 Interpretation

In Arizona, legal malpractice claims are governed by the statute of limitations set forth in A.R.S. § 12-542 (2003), which provides that such claims must be brought "within two years after the cause of action accrues." See also Commercial Union Ins. Co. v. Lewis & Roca, 183 Ariz. 250, 254, 902 P.2d 1354, 1358 (App. 1995) (holding that the statute of limitations for a legal malpractice action "begins to run when a cause of action accrues").

Arizona follows the "discovery rule" in determining the date the cause of action for a legal malpractice claim accrues. Id. ("The determination of when a cause of action accrues on a claim for legal malpractice is governed by the discovery rule.").

"Traditionally stated, this rule provides that a claim for attorney negligence cannot accrue until the client knows or should know of his attorney's negligent conduct." Id.; see also Kiley v. Jennings, Strouss & Salmon, 187 Ariz. 136, 139, 927 P.2d 796, 799 (App. 1996) ("A claim for legal malpractice accrues when:

(1) the plaintiff knows or reasonably should know of the attorney's negligent conduct; and;

(2) the plaintiff's damages are ascertainable, and not speculative or contingent.").

When the alleged malpractice occurs during the course of litigation, however, Arizona courts have held that the "injury or damaging effect on the unsuccessful party is not ascertainable until the appellate process is completed or is waived by a failure to appeal." Amfac Distrib. Corp. v. Miller (Amfac II), 138 Ariz. 152, 154, 673 P.2d 792, 794 (1983).

Consequently, "it is only in the context of litigation . . . that accrual of the cause of action is deferred until the litigation in which the malpractice arose is finally resolved." Commercial Union Ins. Co., 183 Ariz. at 256, 902 P.2d at 1360.