On April 17th, the American Bar Association provided a formal opinion regarding the requirement that attorneys disclose errors to clients.  Its opinion was based on Rule 1.4 of the Model Rules of Professional Conduct, which governs communications with clients.  The ABA concluded that attorneys have a duty to disclose material errors to clients, but no duty to disclose errors to former clients.  In this context, an error is material if a disinterested attorney would believe that the error would likely cause harm or prejudice to the client, or that the error would reasonably cause a client to consider terminating the practitioner's representation -- even if there would be no prejudice to the client.

Rule 1.4 of the Model Rules of Professional Conduct is the widely-adopted basis for the duty of disclosure to clients.  Forty-nine of the fifty states have adopted versions of the Model Rules of Professional Conduct, along with the U.S. Patent and Trademark Office and four of the five U.S. territories.[1]

The U.S. Patent and Trademark Office's version of Model Rule 1.4 reads:

(a) A practitioner shall:
    (1) Promptly inform the client of any decision or circumstance with respect to which the client's informed consent is required by the USPTO Rules of Professional Conduct;
    (2) Reasonably consult with the client about the means by which the client's objectives are to be accomplished;
    (3) Keep the client reasonably informed about the status of the matter;
    (4) Promptly comply with reasonable requests for information from the client; and
    (5) Consult with the client about any relevant limitation on the practitioner's conduct when the practitioner knows that the client expects assistance not permitted by the USPTO Rules of Professional Conduct or other law.
(b) A practitioner shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation.

37 C.F.R. § 11.104.  The obligation to disclose errors arises primarily out of sections (a)(1) and (a)(3), but also relies upon sections (a)(2) and (a)(4).  Specifically, a material error is the sort of information that forms an important part of the status of a case or matter and would lead the client to have to make informed decisions.  In light of those provisions, numerous states (both courts and bar associations) have found that an attorney has an obligation to disclose any errors that could cause prejudice to a client, underlie an ethics complaint, or give rise to a malpractice claim.

The ABA found that the obligation of disclosure would go further, however.  Even if there is no prejudice to the client, it concluded that there would be a duty to disclose errors that an independent, disinterested attorney would believe would cause a reasonable client to lose confidence in the erring practitioner.  Notably, no jurisdiction has yet found such an obligation of disclosure, and the issue would not come up in the context of a malpractice case.  However, it could come up in the context of an ethics complaint, and the risk of non-disclosure (or covering up) a non-prejudicial error is likely greater than the cost of disclosing it with an explanation.

In determining the scope of the obligation of disclosure, however, the ABA found a clear limit.  Namely, the obligation to disclose extends only to current clients.  Rule 1.4 describes the obligation of communication as relating to a "client," not to former clients.  As a result, if the error is not identified until after the representation ends -- and the representation has been terminated in accordance with Rule 1.16 -- there is no obligation to disclose an error.  There may be practical reasons, such as goodwill or business development, for such a disclosure, but there is no ethical obligation under this ABA opinion.

Thus, the ABA has drawn a clear division between current and former clients with regard to the disclosure of errors.  For a current client, a practitioner must disclose errors that a reasonable, disinterested practitioner would believe (a) would be reasonably likely to harm or prejudice the client or (b) would reasonably cause the client to consider terminating the representation.  For former clients, as long as the representation has been properly terminated, there is no ethical duty to disclose any errors whatsoever.

[1] California has not adopted the Model Rules, but has a provision analogous to Rule 1.4 in its rules.  Furthermore, the bar has proposed adoption of the Model Rules to the California Supreme Court.  The only territory that has not adopted the Model Rules is Puerto Rico.