As attorneys, we tend to focus on how to avoid being sued by a client in the first place. After all, the lawyer’s role is to protect the client’s interests and to take the actions necessary to secure this objective. No lawyer wants to face disciplinary action or a malpractice lawsuit, let alone the anger and disappointment expressed by the client whose matter was mishandled. But sometimes mistakes are made. Filing deadlines are missed. Statutes of limitations are blown. Conflicts of interest are overlooked or perhaps ignored. Mistaken, misplaced, or even plainly wrong advice is given. What should a lawyer do when an error is made? And now that the error is recognized, has a conflict of interest arisen between the lawyer himself and his client?
Ethical duties when a mistake happens
Sometimes mistakes can be corrected and that is the end of it. Other mistakes may impose a duty to withdraw from representation and inform the client that it now has a potential malpractice claim. When the lawyer recognizes that he has made a mistake, he has potential obligations to both his client and to his malpractice (sometimes “errors and omissions”) carrier. Foremost, the lawyer is obligated to meet her ethical obligations to the client. The two primary ethical duties to keep in mind are the duties to communicate with the client, including keeping the client reasonably informed and to avoid impermissible conflicts of interest. Nevada Rules of Professional Conduct 1.4, 1.7 and 1.8.
Nevada Rules of Professional Conduct
But how does the lawyer know if the mistake is such that there is now a conflict of interest between her and her client? The primary resources are the Nevada Rules of Professional Conduct (Nevada Rules) and the ABA Model Rules of Professional Conduct. Keep in mind that, while the preamble and comments to the ABA Model Rules of Professional Conduct have not been enacted through the Nevada Rules, they may be consulted for guidance in interpreting and applying the Nevada Rules, unless there is a conflict between the Nevada Rules and the ABA preamble and comments. Id. 1.0A. The Nevada Rules are clear: failing to comply with an obligation or prohibition imposed by a rule is a basis for invoking the disciplinary process. Id. 1.0A(c). Yet violation of a rule “should not itself give rise to a cause of action against a lawyer nor should it create any presumption in such a case that a legal duty has been breached.” Id. 1.0A(d) (explaining that while the rules “are not designed to be a basis for civil liability” or to be “invoked by opposing parties as procedural weapons,” they are “standards of conduct by lawyers,” and “are designed to provide guidance to lawyers and to provide a structure for regulating conduct through disciplinary agencies.”).
Determining if there is a conflict of interest
At what point does a conflict exist? Most courts and other authorities are in general agreement that some combination of the following factors is relevant:
- How clear-cut is it that the lawyer was negligent?
- Can the error be remedied without harm to the client?
- How severe are the potential consequences of the mistake for the client, assuming that the error cannot be cured?
Each of these factors pose the same ultimate question: What is the likelihood of a substantial malpractice claim against the lawyer as a result of the mistake in question? Using this standard, the extreme example exists when both the lawyer has committed an error and the client has threatened a malpractice claim. At this point, a clear conflict exists because the client and the lawyer have become direct adversaries. But the client does not have to express the threat of a malpractice claim in order to create the conflict. Indeed, the greater the risk that a lawyer will face a substantial malpractice claim due to the error and the greater his personal interest in the client’s ongoing matter, the more difficulty he will have providing impartial advice, and the more likely it is that his representation of the client will be materially limited.
Consider these steps
If facing a possible malpractice lawsuit, consider the following steps:
- Tell the malpractice insurer even if the client has not filed suit. Failure to report could lead to a loss of coverage. Check the policy’s required notice provisions, limits, and deductible. Also, review provisions relating to the selection of counsel to defend your firm.
- Alert the lawyers involved. Get together, review the lawsuit, and request each attorney’s cooperation as the case moves forward.
- Hire an outside firm that specializes in malpractice cases. Professional liability is a specialized area; someone who knows the rules, procedures, experts, and standards for causation is needed.
- Make sure the firm has attorneys experienced in the specific practice area involved in your case. This may mean retaining a full-service firm.
- Assign a point person. Ideally, a firm’s Ethics Partner/General Counsel should be the primary contact for outside counsel.
- Be guarded in discussions. Just because attorneys at your firm are discussing the claim, it doesn’t guarantee the communication is protected by attorney-client privilege. Hiring an outside law firm helps make clear what is privileged.
- Issue a gag order. To avoid potentially damaging and embarrassing comments, staff and attorneys should avoid written and verbal case discussions, including email and social media communications. Regularly remind employees that the gag order extends outside the office too.
- Save information related to the case. Get the IT department to help make sure preservation obligations on all documents and electronic data are met.
- Fix mistakes. Ignoring problems won’t make them disappear. Address the issue right away to avoid more trouble. Sometimes a conflict of interest arises between you and a client and you need to withdraw or get a client waiver for continued representation. You may also want to pursue ongoing ethical training to help your firm identify and confront potential issues before they lead to a lawsuit.
- Stay calm. As you know, lawsuits can take an emotional toll while a resolution is being worked out. Try to find ways to relax.
- After the dust settles. All lawyers make mistakes, and unfortunately, sometimes those mistakes result in potential malpractice claims. If and when confronted by this situation, take a deep breath and keep the above tips in mind.
Source: Clark County Bar Association, Communiqué