April 10, 2019 Practice Points

Disclosing Mistakes: Understanding Model Rule 1.4 and Formal Opinion 481

It is essential to know “what” to disclose and “when” you must disclose mistakes to clients.

By Michael S. LeBoff

All lawyers make mistakes. It does not matter how long you have been practicing, where you went to law school, how many hours you bill, or how hard you try. Mistakes will happen.  Fortunately, most mistakes are not disastrous, and if addressed early, most mistakes are fixable. But, given that it is a matter of “when” and not “if” you will make a mistake, what should you do it when it happens?

ABA Model Rule 1.4 lays out an attorney’s obligation to communicate with the client. Subsection (a)(3) requires an attorney keep the client reasonably informed about the status of the matter. What does that mean when it comes to mistakes? Last year, the Standing Committee on Ethics and Professional Responsibility issued Formal Opinion 481 specifying a lawyer’s duty to inform a current or former client of the lawyer’s material error. Formal Opinion 481 states that Model 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.

What is a “material error?” First, an error is material if a disinterested lawyer would conclude the mistake is reasonably likely to harm or prejudice a client. Ultimately, this is a case-by-case, fact-specific inquiry, but it is a lesser standard than a mistake giving rise to a legal malpractice claim. The second alternative is where the mistake is of such a nature that a disinterested lawyer would conclude the mistake would reasonably cause a client to consider terminating the representation in the absence of any harm or prejudice. The mistake does not have to be so extreme that it would cause the client to terminate the representation, only that the client would consider terminating the representation.

The next question is when the lawyer should disclose the mistake. It will depend on the magnitude of the mistake and the immediacy of the resulting harm. In many cases, the lawyer can try to fix the mistake before disclosing, provided the lawyer does so promptly. The lawyer can also consult with in-house counsel or ethics counsel before disclosing the mistake to the client.

The duty to disclose mistakes applies only to current clients. Under Model Rule 1.4, an attorney has no ethical obligation to tell a former client about material errors. It does not matter if the error is fixable. It does not matter if the error will cause immediate and irreparable harm to the former client. But, distinguishing between current and former clients is not always easy. If your firm represents the client in multiple matters, the client is a current client even if the error happened in a case that has long-since ended. If you or your firm handles all matters for a client in a specific practice area, the client may be a current client even if there are no active matters. If you or your firm act as general counsel for a client, that client is a current client even if a substantial amount of time has passed since services were last rendered.

The same is true for what the Standing Committee referred to as “episodic clients.” This is a client that hires you whenever the client requires legal representation, but the client’s legal needs are not constant or continuous. Episodic clients may be current clients if the client reasonably expects that the professional relationship will span any intervals and that the lawyer will be available when the client next needs representation. But, if it is one-time representation on a discreet matter or litigation, there is no ethical duty under the Model Rules to disclose material errors once the representation ends.

Keep the foregoing in mind, should you need to address such a situation.

Michael S. LeBoff is a partner with Klein & Wilson in Newport Beach, California.


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