A lawyer who commits a material error in the representation of a current client is ethically obligated to disclose that error to the client.
According to the ABA Standing Committee on Ethics and Professional Responsibility’s Formal Opinion 481, Rule 1.4 of the ABA Model Rules of Professional Conduct does not permit a lawyer to conceal a mistake from a client and simply hope for the best. Rather, the ethical lawyer must “self-report” a material mistake to a current client and deal with the consequences that may result.
Materiality of a Mistake Is Fact-Specific
Under the opinion, an error is material “if a disinterested lawyer would conclude that it is (a) reasonably likely to harm or prejudice a client; or (b) of such a nature that it would reasonably cause a client to consider terminating the representation even in the absence of harm or prejudice.” This requires an objective evaluation by the lawyer. “Even if a lawyer subjectively believes in good faith that an error is not material, that alone is not determinative under this objective standard,” advises Ethan T. Tidmore, Birmingham, AL, cochair of the ABA Section of Litigation’s Pretrial Practice & Discovery Committee.
A lawyer who has made an error “oftentimes will not be able to disengage from the situation sufficiently to clearly assess the situation,” cautions Robert E. Poundstone IV, Montgomery, AL, cochair of the Section of Litigation’s Ethics & Professionalism Committee. Poundstone recommends that lawyers who have firm counsel available “seek that counsel’s opinions to get a perspective more in line with the disinterested lawyer.”
An error that does not necessarily prejudice a client may still need to be disclosed, notes John M. Barkett, Miami, FL, cochair of the Section’s Ethics & Professionalism Committee and a member of the ABA Standing Committee on Ethics and Professional Responsibility. For example, a series of errors not independently prejudicial “may say something about your organization, the care with which you are handling the matter, or the way you schedule things, and may give the client pause about whether to continue the representation,” suggests Barkett. In those cases, the opinion requires disclosure, he says.
The timing of disclosure is also important. “Disclosure must be prompt notice under the circumstances, which is very fact-specific,” says Barkett. While some errors can be resolved without any client impact, “once it becomes apparent there is no immediate remedy, it is imperative that the lawyer promptly notify the client,” urges Poundstone. “In all cases, the client must be notified well before the delay causes impact to the client beyond the initial impact of the error itself,” he adds.
Current and Former Clients Distinguished
Under this opinion, if a lawyer does not discover an error until after the representation has ended, the lawyer has no obligation to inform the former client—even if the error is material. But Section leaders caution that best practices may warrant disclosure of an error, even after the representation of that client has ended. “In finding that the obligations of disclosure do not extend to errors that present after the end of the engagement, the opinion does correctly note that there may very well be business and risk management reasons that a lawyer should still disclose an error to the former client,” says Poundstone. And disclosure to a former client may be more than just good business and risk management. “In most circumstances, disclosure to the former client is absolutely the right thing to do,” concludes Poundstone, particularly when the former client may be able to avoid negative consequences or lessen the impact of the error.
Err on the Side of Disclosure
Section leaders advise erring on the side of disclosure when evaluating whether a client is a current client and whether an error is material. Clients with retainer agreements are still current clients, even if they do not have a current active matter, notes Barkett. If there is any ambiguity about whether a client would believe themselves to still be a current client, a lawyer should err on the side of disclosing, Tidmore adds. Lawyers also should remember that disclosure obligations will apply to material mistakes made by people they supervise, Barkett advises.
Determining materiality of an error calls for the same approach. “As a general rule, if a lawyer is in doubt whether or not an error is material, the lawyer should go ahead and promptly disclose the error to the client,” Poundstone says. “Hindsight is 20/20 and you may not realize an error is material until some time has passed,” he explains. “It would seem a much better course of action to disclose an error that ends up being immaterial than failing to disclose one that ends up being significant,” Poundstone notes.
Disengagement Letters Can Provide Clarity
Another important takeaway for litigators is the need for formal disengagement letters that give formal notice to a client that the lawyer’s representation has ended. “This opinion underscores the importance of sending a closing letter to the client upon the conclusion of the representation,” advises Tidmore. “Lawyers can sometimes fall into a bad habit of not sending a disengagement letter because they are hopeful the client will continue to look to them as their lawyer,” says Barkett. “But the best practice is to send the disengagement letter so you and your client know your obligations as to that matter are concluded,” he adds.
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C. Thea Pitzen is a contributing editor for ABA's Litigation News.
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