Can a professional use a client's pre-existing negligence as a defense? Steiner Corporation v. Johnson & Higgins of California Explained

The Utah Supreme Court addressed critical questions about professional negligence defenses in a case involving an actuarial firm’s liability to its corporate client. The decision clarifies when professionals can—and cannot—escape liability by blaming their clients’ prior conduct.

Background and facts: Steiner Corporation hired Johnson & Higgins, an actuarial firm, to handle aspects of its employee retirement plan. When Steiner sued for professional malpractice, claiming J&H failed to provide timely advice that cost Steiner the opportunity to modify its plan formula, the trial court found Steiner 60% negligent for creating the problematic benefit plan, failing to consult a lawyer, and not acting despite knowing the plan was problematic. The federal court certified questions to the Utah Supreme Court about whether such pre-existing client negligence could support comparative negligence defenses.

Key legal issues: The court addressed two questions: (1) whether a client’s negligent acts in creating the situation that required professional services can form the basis for comparative or contributory negligence defenses, and (2) whether such acts can be considered when determining causation and damages.

Court’s analysis and holding: The Utah Supreme Court answered both questions “no.” The court emphasized that contributory negligence requires the plaintiff’s negligence to be “causally connected” to the injury. Here, the injury was J&H’s failure to provide timely professional services, not the pre-existing plan problems. The court distinguished cases where clients’ conduct after engaging professionals contributed to the professional’s failure to perform. Following other jurisdictions, the court held that allowing such defenses would permit professionals to avoid responsibility for the very duties they undertook to perform.

Practice implications: This decision protects the integrity of professional relationships while clarifying liability standards. Professionals cannot escape liability by pointing to client conduct that created the need for their services. However, client conduct occurring after engagement that interferes with or contributes to the professional’s failure can still support negligence defenses. Practitioners should carefully distinguish between pre-engagement conduct and post-engagement contributory negligence when analyzing professional liability claims.