When Must a Lawyer Inform the Client about the Lawyer’s Mistake?

           

We have all made our share of embarrassing mistakes.  Often, the hardest part is admitting it.  If a lawyer makes a mistake, does he or she have a duty to inform the client?  According to a recent American Bar Association ethics opinion, the answer may be yes.

 

The ABA opines that “[i]f a lawyer errs and the error is material, the lawyer must inform a current client of the error.”  ABA Comm. on Ethics & Prof’l Responsibility, Formal Op. 481 at 1 (2018).  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.”  Id. at 2.  The lawyer should disclose such an error to the client promptly under the circumstances.  Id. at 5.  Where it is reasonable to do so, the lawyer may attempt to correct the error before informing the client.  Id.

 

The Colorado Bar Association considered this question in 2005 and reached a similar answer.  CBA Ethics Comm. Formal Op. 113 at 1 (2005) (“[A] lawyer has an ethical duty to make prompt and specific disclosure to a client of the lawyer’s error if the error is material.  A material error is one that will likely result in prejudice to a client’s right or claim.”).  A number of ethics opinions in other jurisdictions agree.

 

The duty to report a material error to the client is rooted in Colorado Rule of Professional Conduct 1.4, which governs communication with clients.   Under Rule 1.4(a)(2), a lawyer must reasonably consult with the client about the means by which the client’s objectives are to be accomplished.  Under Rule 1.4(a)(3), the lawyer must keep a client reasonably informed about the status of a matter.  The lawyer must also explain a matter to the extent reasonably necessary to allow the client to make informed decisions regarding the representation under Rule 1.4(b).

 

What errors must a lawyer report to a client?  The ABA notes that the determination can be difficult because errors exist along a continuum.  At one end are “errors that effectively undermine the achievement of the client’s primary objective for the representation, such as failing to file the complaint before the statute of limitations runs.”  ABA Formal Op. 481 at 3 (quoting 2015 N.C. State Bar Formal Op. 4, 2015 WL 5927498, at *2).  At the other end are “nonsubstantive typographical errors” or “missing a deadline that causes nothing more than delay.”  Id.  For those errors in the middle of the spectrum, a lawyer should consider whether the error causes financial loss, substantial delay, or material disadvantage to the client’s position.  Id.  The lawyer may also need to consider whether the error creates a conflict of interest under Colo. RPC 1.7(a)(2) because there is a significant risk that the representation will be materially limited by the lawyer’s personal interest.  Id.  The ABA does not purport to precisely define the scope of a lawyer’s disclosure obligation, although it provides guidance to help a lawyer’s analysis.  Id. at 4.

 

In addition, the lawyer’s error might implicate other rules.  Missing critical deadlines could give rise to a violation of Colo. RPC 1.3 (a lawyer shall act with reasonable diligence and promptness in representing a client).  A badly mishandled case could implicate Colo. RPC 1.1 (a lawyer shall provide competent representation to a client). 

 

Neither ABA Formal Opinion 481 nor CBA Formal Opinion 113 suggests that a lawyer must inform the client that the lawyer’s error might violate the Rules of Professional Conduct.  There is no rule requiring a lawyer to self-report an error to the regulatory authority, absent a criminal conviction or discipline imposed by a foreign jurisdiction.  See C.R.C.P. 251.20(b) & 251.21(b).  A lawyer has a duty to report another lawyer’s violation of the Rules of Professional Conduct, however, where the violation raises a substantial question as to that lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects.  Colo. RPC 8.3(a).

 

CBA Formal Opinion 113 does suggest that a lawyer should inform the client that it might be advisable for the client to consult with independent counsel about the error, which may include advice about the statute of limitations on a malpractice claim, although the lawyer need not opine on whether such a claim actually exists or has merit.  CBA Formal Op. at 1.  Note that a lawyer may not make an agreement prospectively limiting malpractice liability unless the client is independently represented in making the agreement.  Colo. RPC 1.8(h)(1).

 

The worst course of action is to actively conceal the error or lie to the client about it.  See CBA Formal Op. 113 at 4 (“Candor is a given.”).  In People v. Muhr, 370 P.3d 677 (Colo. O.P.D.J. 2016), a lawyer allowed the statute of limitations to expire on a client’s civil matter, and then directed his staff to provide the client a purported settlement check, misleading the client into believing the case had settled.  The lawyer was suspended for a year and a day, with nine months served and the remainder stayed upon completion of a three-year period of probation.

 

The ABA finds that Rule 1.4 does not require a lawyer to disclose a material error to a former client, although determining when the representation ends is not always easy.  See ABA Formal Op. 481 at 5-8.

 

CBA and ABA ethics opinions are not binding on the Office of Attorney Regulation Counsel or the Office of the Presiding Disciplinary Judge.  But Regulation Counsel generally considers ethics opinions in exercising its prosecutorial discretion and analyzing a lawyer’s mental state.