Rule 1.4 of the Rules of Professional Conduct sets forth a lawyer’s duty to communicate with clients. For these purposes, the Rule provides:
(a) A lawyer shall:
(1) promptly inform the client of any decision or circumstance with respect to which the client's informed consent, as defined in Rule 1.0(g), is required by these Rules;
. . .
(3) keep the client reasonably informed about the status of the matter;
. . .
(b) A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation.
A lawyer’s mistake which affects the merits of the client’s matter clearly gives rise to the duty to reasonably inform the client about the status of the matter and to explain the mistake to allow the client to make informed decisions about the matter. Further, since such a mistake implicates the lawyer’s personal interest in not getting sued for malpractice, there is likely a concurrent conflict of interest for which the lawyer must obtain a conflict waiver with the client’s informed consent and, therefore, must promptly inform the client of the circumstances surrounding the mistake.3
The ABA Standing Committee on Ethics and Professional Responsibility issued the following Formal Opinion 481 on April 17, 2018, to elucidate what kind of mistakes a lawyer should report to a client:
Model Rule of Professional Conduct Rule 1.4 requires a lawyer to inform a current client if the lawyer believes that he or she may have materially erred in the client’s representation. Recognizing that errors occur along a continuum, 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. No similar obligation exists under the Model Rules to a former client where the lawyer discovers after the attorney-client relationship has ended that the lawyer made a material error in the former client’s representation.
The North Carolina State Bar has promulgated a formal ethics opinion which describes what a lawyer should and should not tell the client. 2015 N.C. Eth. Op. 4. This opinion advises that the lawyer should fully inform the client of the operative facts concerning the mistake and its potential effects on the matter. The opinion warns, however, that the lawyer need not and, in fact, should not advise the client whether there are grounds for a malpractice claim against the lawyer since there is a clear conflict of interest in doing so. Best practices suggest lawyers should consult with their professional liability insurance carriers to discuss how to communicate the mistake to clients.4
A conflict of interest arises when a lawyer makes a material mistake in handling a client matter because the lawyer’s personal interest is affected. Rule 1.7 states, in relevant part, as follows:
(a) Except as provided in paragraph (b), a lawyer shall not represent a client if the representation involves a concurrent conflict of interest. A concurrent conflict of interest exists if:
. . .
(2) there is a significant risk that the representation of one or more clients will be materially limited . . . by a personal interest of the lawyer.
Given the inherent conflict of interest arising from a material mistake, a lawyer must then determine whether he should withdraw from the matter or continue representing the client. Rule 1.16(a)(1) of the Rules of Professional Conduct requires a lawyer to withdraw if the representation will result in violation of the Rules of Professional Conduct. Therefore, the lawyer must revisit Rule 1.7 on conflicts to decide if a waiver is appropriate and continued representation is possible.
Rule 1.7 provides for conflict waivers as follows:
(b) Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a lawyer may represent a client if:
(1) the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client;
. . . ; and
(4) each affected client gives informed consent, confirmed in writing.5
Again, the North Carolina State Bar’s ethics opinion, 2015 N.C. Eth. Op. 4, provides a thoughtful discussion of when a waiver is proper. The pertinent question is whether the client’s objectives can still be achieved. Often, following a mistake, the lawyer may be able to take corrective action which avoids or mitigates the consequences to the client. If corrective action is in the best interests of both the client and the lawyer, a waiver of the conflict is possible. Lawyers, however, may in no way put their interests first in violation of their fiduciary duty. In addition, the client must give informed consent in writing for the conflict waiver which makes the lawyer’s disclosure of the circumstances of the mistake and its possible effects on the matter all the more important. There are, nevertheless, situations in which the client’s objectives can no longer be achieved in light of the lawyer’s mistake, and the lawyer should withdraw.
Three things are certain:
- Do not hide a mistake from your client.
- Provide a full explanation of the operative facts to your client.
- Withdraw if a material mistake cannot be fixed.
1 Alexander Pope.
2 For these purposes, while some of the language may differ, the substance of South Carolina, North Carolina and Georgia Rules 1.4, 1.7 and 1.16 is the same as that of the ABA Model Rules of Professional Conduct.
3 The duty to inform the client of a mistake may be different than the duty to notify the lawyer’s professional liability insurance carrier. The latter duty is governed by the policy language.
4 Indeed, an admission of liability to the client will constitute a violation of most professional liability insurance policies and probably render coverage void.
5 Georgia’s Rule 1.7 states this in the negative, prohibiting waiver if the mistake “involves circumstances rendering it reasonably unlikely that the lawyer will be able to provide adequate representation to one or more of the affected clients.”