Lawyers must inform current clients of material errors

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Ellen Murphy

Ellen Murphy. Photograph courtesy of Wake Forest Law School.

Lawyers have a duty to inform current clients of material errors committed by them during the course of representation, according to a recently released ethics opinion from the ABA’s Standing Committee on Ethics and Professional Responsibility. However, the opinion also says that lawyers do not have to inform former clients of such material errors.

Formal Opinion 481 explains that this duty to current clients is rooted in Rule 1.4 of the ABA Model Rules of Professional Conduct, which governs a lawyer’s duty of communication. That rule requires lawyers to promptly inform clients of any decision or circumstance for which a client’s informed consent is needed. It also requires a lawyer to “reasonably con-sult” with the client about the means of achieving the client’s goals during representation and keeping the client “reasonably informed” about the progression of the case.

According to the committee, the “guiding principle” of Model Rule 1.4 is reflected in language in Comment 5 of the rule: “The lawyer should fulfill reasonable client expectations for information consistent with the duty to act in the client’s best interests, and the client’s overall requirements as to the character of representation.” This means that a lawyer cannot “withhold information from a client to serve the lawyer’s own interests or convenience.”

A CLarification conundrum

The opinion acknowledges that “determining whether and when a lawyer must inform a client of an error can sometimes be difficult because errors exist along a continuum.” It explains that the duty of informing clients of errors applies when the error is considered material.

The opinion explains that 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.”

Kevin Swisher

Keith Swisher: “For errors potentially on the borderline, the committee’s two-part definition of materiality is fairly expansive and will therefore better protect clients.” Photograph courtesy of the University of Arizona.

“Many obviously material errors arise,” says Keith Swisher, a professor of legal ethics at the University of Arizona’s James E. Rogers College of Law. “For errors potentially on the borderline [between material and nonmaterial], the committee’s two-part definition of materiality is fairly expansive and will therefore better protect clients.”

Some ethics experts question whether the definition provides sufficient guidance and have concerns that it may create more problems. “Despite the committee’s laudable goal of providing more specific guidance and its conclusion that the standard for determining what is material is an objective one, I think lawyers may still struggle, practically, with what is material error,” says Ellen Murphy, who teaches professional responsibility at Wake Forest University School of Law.

Leslie C. Levin, a professor at the University of Connecticut School of Law, sees problems with the definition. “The problem with the first definition of ‘material’—which is the ‘harm or prejudice’ component—is that the opinion notes don’t give much meaningful guidance to help the lawyer determine how much harm or prejudice triggers the duty to inform. The opinion says it wants to give lawyers more specific guidance, but then really doesn’t provide it.” She also questions the second part of the definition related to errors that would cause a client to terminate the representation. “Of course, it would be great if all clients were informed of all potentially serious errors so they could make informed decisions about whether to continue with the representation.” She questions whether lawyers will self-disclose such errors when many lawyers do not comply with Rule 8.3, which requires lawyers to report violations by other lawyers that raise substantial questions about that other lawyer’s fitness to practice.

“In essence, that part of the opinion is articulating an interpretation of Rule 1.4 that is unlikely to be followed by many lawyers,” Levin says. “This creates its own set of problems. It also potentially creates disincentives for lawyers to reflect back on their mistakes. If lawyers know they have an obligation to reveal certain errors to clients, even if they caused no harm, will they want to think reflectively about those errors?”

The opinion explains that if there is such a material error, the attorney must inform the client promptly. Whether an attorney has time to correct the error first before telling the client depends on the individual facts.

DIVIDED experts

Leslie Levin

Leslie Levin: “The opinion says it wants to give lawyers more specific guidance, but then really doesn’t provide it.” Photograph courtesy of the University of Connecticut.

While the opinion says attorneys have the duty to inform current clients, “nowhere does Model Rule 1.4 impose on lawyers a duty to communicate with former clients.” The opinion adds, “Had the drafters of the Model Rule intended Rule 1.4 to apply to former clients, they presumably would have referred to former clients in the language of the rule or in the comments to the rule.”

Experts are divided on whether lawyers should have the responsibility to inform former clients. “I agree with the committee’s practical approach that it would not be reasonable to require lawyers to disclose material errors discovered years—or even months—after the representation has ended,” says Murphy. “This makes sense based on the nature of law practice today.”

However, Swisher believes lawyers also should have a duty to inform former clients. “The opinion is indeed somewhat surprising in this regard,” he says. “Using its own words, the committee could instead have interpreted the duty to communicate, and the duty to take steps to protect the client during the represen-tation’s closure or succession, in the spirit of client protection and the purposes of legal representation.”

He explains such an approach could have led the committee “to conclude that even former clients should be informed of the lawyer’s materially erroneous work product.” Swisher says “fiduciary-based arguments for a duty to report could extend to technically former clients; and in any event, attorneys will ordinarily discover an error—especially under the committee’s commendably broad definition of materiality—before the representation ends.”

This article was published in the July 2018 ABA Journal magazine with the title "Lawyers Must Inform Current Clients of Material Errors: No such duty to former clients."

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