What To Do If You’ve Goofed

May 30, 2015

Have you ever made a mistake in your practice?  Of course you have.  We all have.  The question is what are you ethically required to do when that happens?  Must you disclose the mistake to the client? If so, what exactly do you have to tell him or her?  If your mistake was a doozy, do you have to tell the client he or she needs to seeks other counsel or that they may have a malpractice claim against you?

This is the subject of a newly proposed ethics opinion, Proposed 2015 FEO 4*.  According to the opinion, not all mistakes will need to be disclosed to the client.  Small, insignificant errors may not need to be disclosed.  Whether a mistake must be reported depends upon the materiality of the mistake.  Mistakes that would give rise to a malpractice claim must always be reported to the client.  Beyond that, here is what the proposed opinion says:

If the error will result in financial loss to the client, substantial delay in achieving the client’s objectives for the representation, or material disadvantage to the client’s legal position, the error must be disclosed to the client. Similarly, if disclosure of the error 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, the lawyer may not withhold information about the error. Rule 1.4. When a lawyer does not know whether disclosure is required, the lawyer should err on the side of disclosure or should seek the advice of outside counsel, the State Bar’s ethics counsel, or the lawyer’s malpractice carrier.

The question then becomes, if you must report the mistake to the client, what do you need to say?  The proposed opinion provides:

The lawyer must candidly disclose the material facts surrounding the error, including the nature of the error and its effect on the lawyer’s continued representation. If the lawyer believes that she can take steps to remedy the situation or mitigate or avoid a loss, the lawyer should discuss these with the client while informing the client that the client has the right to terminate the representation and seek other counsel. Rule 1.4.

The proposed opinion also makes clear that the attorney should not state or discuss whether the client may have a malpractice claim against the attorney, and should not give legal advice regarding such claim, as it is a conflict of interest to do so.   The attorney should, however, inform the client that it may be “advisable to consult with an independent lawyer with respect to the potential impact of the error on the client’s rights or claims.”  The proposed opinion also advises that the attorney need not

inform the client of the statute of limitations applicable to legal malpractice actions, nor is she required to give the client information about the lawyer’s malpractice insurance carrier or information about how to file a claim with the carrier. 

This is one of those rare instances where it appears that more disclosure is not necessarily better.   Still, before discussing any error with your client, the proposed opinion suggests consulting your liability carrier’s claims counsel about how they would want you to proceed and what information should be provided to the client.

Look for a later blog on whether you must withdraw from representation in the face of an error.

*This is not yet a final opinion, and is set to be heard at the July 2015 Ethics Committee meeting.

Comments are closed.