United States: ABA Explains When A Lawyer Must Tell A Client About A Mistake By The Lawyer

Peter R Jarvis is a partner in Holland & Knight's Portland office

Calon N Russell is a associate in Holland & Knight's Portland office

HIGHLIGHTS:

  • The American Bar Association's (ABA) Standing Committee on Ethics and Professional Responsibility recently released Formal Opinion 481 addresses the question when a lawyer who has made a mistake must tell the client about it.
  • Opinion 481, released on April 17, 2018, concludes that as a matter of legal ethics, lawyers must inform current clients about material errors but need not inform former clients.
  • As Opinion 481 makes clear, the duty to inform a client of a mistake is not contingent on the client having a viable legal malpractice claim against the lawyer. Opinion 481 does not address whether or when a lawyer who is concerned that the lawyer may have made a mistake must also inform the client.

Sooner or later, pretty much everyone – lawyers included – makes mistakes. And when lawyers make mistakes, clients can be harmed. The American Bar Association's (ABA) Standing Committee on Ethics and Professional Responsibility recently released Formal Opinion 481 addresses the question when a lawyer who has made a mistake must tell the client about it. Opinion 481, released on April 17, 2018, concludes that as a matter of legal ethics, lawyers must inform current clients about material errors but need not inform former clients.

Opinion 481 notes, for example, that, "If a lawyer errs and the error is material, the lawyer must inform a current client of the error." This is a part of a lawyer's duty to communicate with a current client under ABA Model Rule 1.4. As Opinion 481 goes on to note, deciding what the lawyer must say and when the lawyer must say it "can sometimes be difficult because errors exist along a continuum." Thus, Opinion 481 states that there will be times (perhaps primarily, if not exclusively, for errors that can quickly and easily be corrected) when it is reasonable for a lawyer to attempt to correct an error before informing the client. Absent such a circumstance, however, the lawyer must inform the client if a disinterested lawyer would conclude that the error is either "reasonably likely to harm or prejudice a client" or the nature of the error "would reasonably cause a client to consider terminating the representation even in the absence of harm or prejudice."

As Opinion 481 makes clear, the duty to inform a client of a mistake is not contingent on the client having a viable legal malpractice claim against the lawyer. Opinion 481 appears to be limited by its terms, however, to situations in which there is no question but that the lawyer has made a mistake. In other words, Opinion 481 does not address whether or when a lawyer who is concerned that the lawyer may have made a mistake must also inform the client. Although a balancing test would presumably need to be applied, it seems likely that there could be at least some situations in which a lawyer's certainty of having made a mistake may be less than absolute but in which a duty to inform the client may nonetheless exist.

Opinion 481 also states that before informing the client, the lawyer who made a mistake may generally "consult with his or her law firm's general counsel, another lawyer, or the lawyer's professional liability insurer." The opinion cites ABA Model Rule 1.6(b)(4) for this proposition, noting that that rule permits disclosure of a client's confidential information by a lawyer "to secure legal advice about the lawyer's compliance with these Rules." Presumably, the justification for disclosure to the professional liability insurer is that the insurer's position may help inform the legal advice that the lawyer is seeking.

With respect to former clients, Opinion 481 asserts that there is no basis in the ABA Model Rules to compel disclosure. Although, as noted, it can at times be difficult to determine who is a current client and who is a former client. Opinion 481 is clear that once a person or entity has become a former client, any duty to inform the client that would have existed if the lawyer had known of the mistake before the representation has terminated no longer exists. On the other hand, and just as a lawyer generally cannot decide to drop one client like a so-called hot potato to avoid a conflict of interest with another, more desirable, client, so too a lawyer generally cannot decide to terminate a relationship with a current client in order to avoid having to tell the client about a material error of which the lawyer is then aware. As Opinion 481 notes, ABA Model Rule 1.16(d) will often if not always require disclosure of what the lawyer knows at the time of withdrawal.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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