The ABA Committee on Ethics recently provided concrete advice to lawyers on when they must inform they clients when they make mistakes. The source of the duty is ABA Model Rule 1.4, dealing with client communication. Crucial to the application of the rule is whether the mistake is “material.” The Committee gave the following guidance on when a mistake meets that standard and must be disclosed:
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.
Under this standard if a lawyer misses the statute of limitations and the error cannot be rectified in some way, the client must be informed. On the other hand, if a lawyer makes a filing error that can corrected, disclosure would not be required. If an error is material, the lawyer must disclose the mistake to the client promptly. Delay in informing the client to attempt to correct the error may be reasonable depending on the circumstances, and in particular the length of time involved in taking corrective action.
Closely reading Rule 1.4, however, the Committee concluded that the rule does not impose a duty to inform former clients of a mistake made during the course of representation. CAUTION: Whether a client is a current or former client requires careful analysis. For example, if the lawyer is representing a client in several matters, the client is a current client for purpose of Rule 1.4 even if the matter where the error occurred is closed. In addition, some clients are “episodic,” i.e. they call on their lawyers from time to time. Such clients, who have a reasonable expectation of an on-going relationship, are current clients even if the matter where the error occurred is over. Note also that while a lawyer does not have an ethical obligation to inform a former client of an error, a lawyer might choose to do so, especially if the error could still be corrected. In addition, the Committee’s opinion deals with ethical obligations; a court might conclude that lawyers owe fiduciary duties to former clients to correct material errors in the representation.
If you are a lawyer seeking advice on ethics and professional responsibility, contact Nathan M. Crystal.