Opinion Explores When to Tell Client ‘I Screwed Up'

Aug. 17 — After committing a serious error an attorney may in many instances keep representing the client and try to fix the problem—if the client gives informed written consent and the lawyer believes she can provide competent and diligent representation, according to a July 17 opinion from the North Carolina bar's ethics committee.

The lawyer needn't tell a client about an innocuous goof that won't harm the client's interests, the committee said.

When the client must be told about the mistake, it added, the lawyer should not say whether a malpractice claim exists or provide legal advice on malpractice claims.

Whether to Tell

A lawyer must tell a client about a mistake when it's necessary to “keep the client reasonably informed about the status of the matter” as part of the lawyer's communication duty under Rule 1.4(a)(3) of the North Carolina Rules of Professional Conduct, the committee said.

Drawing on advice given in Colorado Ethics Op. 113 (2005) and New York State Ethics Op. 734 (2000), the panel said that whether a lawyer must disclose an error under Rule 1.4 depends on where the blunder falls on the spectrum of possible mistakes and what the circumstances are when the error comes to light.

At one end of the spectrum are material mistakes that prejudice the client's rights or claims, such as failing to file a complaint before it becomes time-barred. Such an error that clearly gives rise to a malpractice claim must always be reported to the client, the committee said.

At the other end are minor mistakes that don't harm the client's rights or interests, such as harmless typos in a pleading or a missed deadline that causes nothing more than delay. “[I]f the error is easily corrected or negligible and will not materially prejudice the client’s rights or interests, the error does not have to be disclosed to the client,” the opinion states.

Gray Area in Between

In between these extremes, the panel said, the erring lawyer must analyze whether disclosure is needed to keep the client reasonably informed about his legal matter.

The lapse must be revealed if it will result in financial loss to the client, substantial delay in achieving the client’s objective or material disadvantage to the client’s legal position, it said.

Similarly, the committee said, the lawyer must come clean about the mistake if disclosure is necessary for the client to make an informed decision about the representation or for the lawyer to advise the client of significant changes in strategy, timing or direction of the representation.

When uncertain whether disclosure is required, the lawyer should err on the side of telling the client, or seek the advice of outside counsel, the state bar’s ethics counsel or the lawyer’s malpractice carrier, the committee said.

Continue the Representation?

When a lawyer realizes she made an error that may give rise to a malpractice claim, the committee said, a personal conflict of interest exists under Rule 1.7 (current-client conflicts).

In many instances, the committee said, it's in the best interests of both the lawyer and the client for the lawyer to take corrective action, such as fixing errors made in a title search or trying to block use of privileged materials that were improperly produced.

The representation may continue, the panel said, if the lawyer reasonably believes she'll be able to provide competent and diligent representation despite her personal interest in avoiding malpractice liability. But withdrawal is required, it said, if the client's objective can no longer be achieved, such as when the client's claim is lost due to a blown statute of limitations.

What (Not) to Say

The committee advised that when an error must be disclosed, the lawyer must do so promptly and must candidly reveal the material facts, including the nature of the blunder and its effect on the lawyer's continued ability to represent the client.

If the lawyer hopes to continue as counsel while taking steps to prevent or mitigate the loss, she should discuss this corrective action with the client but also make clear that the client has the right to end the representation and hire other counsel, the committee said.

“The lawyer should not disclose to the client whether a claim for malpractice exists or provide legal advice about legal malpractice,” but must reveal the operative facts about the error and recommend the client seek independent legal advice about the consequences of the mistake, the panel said.

Under this approach, it said, the lawyer is not obligated to tell the client about the time limit for filing a malpractice action, nor is the lawyer required to give the client information about her malpractice insurance.

Lawyers should seek the advice of their insurance carrier before disclosing a mistake to a client, the panel noted.

Rethink Amount of Fee

A blundering lawyer must determine whether a refund of legal fees is necessary to avoid charging a clearly excessive fee under Rule 1.5(a), the committee also advised

“ In addition, the lawyer should never charge or collect legal fees for any legal work or expenses necessitated by the lawyer’s attempts to mitigate the consequences of the lawyer’s error,” the opinion states.

Full text at http://www.ncbar.com/ethics/printopinion.asp?id=904.

The ABA/BNA Lawyers’ Manual on Professional Conduct is a joint publication of the American Bar Association Center for Professional Responsibility and Bloomberg BNA.

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