CCPA in Professional Liability Claims
August 21, 2024
In an effort to get around the American Rule of no recovery for attorney fees on negligence claims, an avenue sometimes explored is the addition of a claim under the Colorado Consumer Protection Act, C.R.S. §6-1-101 et seq. The Act provides for recovery of attorney fees by a successful plaintiff (but not a successful defense unless the claim is frivolous), and treble damages. C.R.S. §6-1-113(2).
C.R.S. §6-1-105 (1)(g) includes among deceptive trade practices when a person represents that services are of a particular standard if he knows or should know that they are of another. Plaintiff attorneys may look to websites of facilities and practitioners for representations allegedly designed to lure in patients and clients. While the common law negligence claim is based on a duty of reasonable care, what a similar practitioner would or would not do under similar circumstances, typically demonstrated by generally accepted practices in the field, websites may include references to providing the best care or descriptors of a practice’s philosophy suggesting a higher standard than the average. Plaintiffs then may argue that the services provided did not meet those standards.
To prove a private claim for relief under the CCPA, a plaintiff must show:
(1) that the defendant engaged in an unfair or deceptive trade practice;
(2) that the challenged practice occurred in the course of defendant’s business, vocation, or occupation;
(3) that it significantly impacts the public as actual or potential consumers of the defendant’s goods, services, or property;
(4) that the plaintiff suffered injury in fact to a legally protected interest; and
(5) that the challenged practice caused the plaintiff’s injury.
Crowe v. Tull, 126 P.3d 196, 201 (Colo. 2006). In the context of a professional liability claim, summary judgments are most often successful in arguing that the requirement for significant public impact has not been met, i.e., that what is alleged is solely a private wrong. The factors in determining if this element has been met are the following:
(1) the number of consumers directly affected by the challenged practice;
(2) the relative sophistication and bargaining power of the consumers affected by the challenged practice; and
(3) evidence that the challenged practice has previously impacted other consumers or has the significant potential to do so in the future.
Rhino Linings, USA, Inc. v. Rocky Mountain Rhino Lining, Inc., 62 P.3d 142, 149 (Colo. 2003). Most courts have held this to be a fairly high standard, making it difficult for plaintiffs to establish in the typical professional liability claim.
This year in the Colorado legislature an attempt was made to remove the public impact requirement. It was argued that it was a judicially constructed requirement that makes it practically impossible to prove the claim. HB 24-1014, titled “Deceptive Trade Practice Significant Impact Standard,” provided that evidence that a person engaged in an unfair or a deceptive trade practice is prima facie evidence of intent to injure competitors and to destroy or substantially lessen competition, and is sufficient to establish a significant impact to the public. Although it made it through the House, the Senate Committee on Judiciary indefinitely postponed it, and it did not become law.
The movement behind the proposed legislation will not go away, and we can expect to see further efforts to expand the applicability of this and similar Consumer Protection Acts around the country as a way to expand recoverable damages. The potential award of attorney fees is seen as a strong deterrent to defending cases through trial, leading to larger settlements and greater exposure at trial. Awareness of, and involvement in, legislation remains an important aspect to the defense of professional liability claims.