Attorney liability: No proof of a hypothetical litigation gain against the pension fund following the erroneous cash payout of the vested benefits

Facts

Parties and instances: The appellants are the children (A.A. and D.A.) of the client B.A., who was represented by the respondent E., a lawyer, in divorce proceedings. The respondent E. is sued in the liability action. The prior instances were the Regional Court of Bern-Mittelland (action dismissed, decision of 17 November 2017, reasons given in writing on 13 June 2018) and the Higher Court of the Canton of Bern, 2nd Civil Chamber (appeal dismissed, decision of 13 November 2019, ZK 18 399). The Federal Supreme Court decided on 16 September 2020 (4A_2/2020).

Facts: The client retained the respondent on 4 September 2003 in the divorce proceedings against her husband C.A., who had initiated the divorce on 9 July 2003 and asserted his lack of means. The spouses had lived apart since 1992; maintenance payments had ceased from February 1994, and debt enforcement proceedings produced a certificate of loss for CHF 62,269.10. The client expressed to the respondent her wish for a swift divorce and wanted to have as little to do with it as possible.

In the divorce proceedings, official inquiries revealed that in 1995 C.A. had withdrawn in cash a vested benefits amount of approximately CHF 476,326.40 from the pension fund [G.] . The cash withdrawal request of 7 November 1995 bore the forged signature of the client. The pension fund had not verified the signature and had not examined the reason for the cash withdrawal (self-employment, evidenced by a commercial register entry of 29 September 1995) in any detail. The payment was made by cheque. The court communicated the results to the spouses; the client confirmed her intention to divorce and her agreement with the convention, whereby the respondent expressly pointed out that no vested benefits remained. The divorce was pronounced on 21 July 2004 (final and binding 28 July 2004).

Subsequently, the Thurgau Debt Enforcement and Bankruptcy Office reported C.A. for bankruptcy offences; the client filed a criminal complaint on 20 August 2007. The pension money had been paid into an account of the partner of C.A. at the Bank [H.] and was still present at the time of the divorce. The client died on 27 March 2010. The children pursued C.A. and on 23 May 2011 obtained definitive debt enforcement (provisio) for CHF 742,000.-- in maintenance; the enforcement of the pledged assets fully covered the maintenance claims.

Action and claims: By action of 10 February 2016, the children claimed damages from the respondent of CHF 238,163.-- plus interest from 21 July 2004. They alleged that in the divorce proceedings he had негligently failed to inquire whether the client had consented to the cash withdrawal, and had not informed her of the possibility of social insurance proceedings against the pension fund.

Prior instances: The Regional Court found a breach of the respondent's duty of care but denied causation: in the divorce proceedings the course of the proceedings would not have differed and the damage was not proven. As regards the social insurance proceedings, the client would presumably have prevailed, but she would have had to request revision of the divorce judgment. The Higher Court upheld the dismissal: upon being informed of the uncertainty of the proceedings and the delay, and in view of the wish for a swift divorce, it was not established with predominant probability that the client would have chosen that path. The client would moreover have waived compensation under Art. 124 aZGB given poor prospects of success.

Appeal: The children requested that the action be upheld (CHF 238,163.-- plus 5% interest from 21 July 2004), alternatively remittal. The respondent requested dismissal. The prior instance waived a response.

Considerations

Scope of review (consid. 1-2): The Federal Supreme Court is bound by the factual findings of the prior instance (Art. 105 para. 1 FSCA); correction is possible only in case of obvious inaccuracy (arbitrariness) and subject to the strict principle of complaint (Art. 106 para. 2 FSCA). The assessment of evidence is reviewed only for arbitrariness.

Attorney liability and causation (consid. 3.1-3.3): The lawyer is liable under Art. 398 para. 1 CO in conjunction with Art. 321e CO for damage caused intentionally or negligently. The four requirements are breach of contract, damage, causal connection and fault. The client bears the burden of proof under Art. 8 CC for breach of contract, damage and causation. In case of an omission, the hypothetical causal course is decisive, for which predominant probability must speak (BGE 124 III 155). Findings of the trial judge on the hypothetical causal course are binding on the Federal Supreme Court, unless they rest exclusively on general life experience. The appellants had not sufficiently challenged the prior instance's findings concerning the divorce proceedings (wish for a swift procedure, waiver of compensation under Art. 124 aZGB), so those findings remained unaffected.

Hypothetical litigation course and legal question (consid. 3.3.4): The appellants relied on BGE 87 II 364, according to which the review of hypotheses may proceed more freely where purely legal questions are concerned. The Federal Supreme Court held that the prospects of litigation, although dependent on a legal question (breach of duty of care by the pension fund under BGE 130 V 103), must be assessed on the basis of the concrete circumstances of the individual case. The prognosis regarding the outcome of the first proceedings, which were not conducted, remains a hypothesis, which is why the Federal Supreme Court exercises restraint.

No violation of the right to be heard (consid. 3.4.1): The complaint of a violation of the duty to give reasons under Art. 29 para. 2 Cst. was dismissed. The prior instance had sufficiently clearly set out why it assessed the prospects of litigation differently from the first instance (timing of the cash payout before INO Circular No. 51, personal acquaintance of the husband with advisers of the pension fund). That the prior instance did not again address the payment by cheque shows that it did not attach decisive importance to this criterion. An appropriate challenge was possible.

Applicable legal position (consid. 3.4.2-3.4.5): Determinative is the case law of the highest court at the time of the original proceedings (divorce of July 2004). BGE 130 V 103 was the leading decision. Under it, where the spouse did not consent, the pension fund may discharge its obligation only if it is not at fault. Whether a breach of duty of care exists depends on the concrete circumstances, whereby the insured's position of trust, the then customary practice of signature verification and the date…