By Thomas P. McGarry and Thomas P. Sukowicz
Hinshaw & Culbertson
When a lawyer makes an error, that error may (or may not) be thebasis for a claim of legal malpractice. If the lawyer is aware of such an error, what must the lawyer tell the client?
In Olds v. Donnelly, 150 N.J. 424 (N.J., 1997), the New Jersey Supreme Court stated that the Rules of Professional Conduct "require an attorney to notify the client that he or she may have a legal-malpractice claim even if notification is against the attorney's own interest." The Illinois Supreme Court has held to the contrary. In Fortune v. English, 226 Ill. 262 (Ill., 1907), the court held that a lawyer is not required to "volunteer information to his client that his client has a cause of action against him."
Although an attorney is not required to advise the client that the client has a malpractice claim against that attorney, an attorney is required to disclose material facts about the representation as well as the significance of those facts. In DeLuna v. Burciaga, 223 Ill.2d 49 (Ill., 2006), the Illinois Supreme Court noted that Rule 4.1 of the Rules of Professional Conduct required attorneys to keep clients apprised of developments in their cases. In discussing whether the legal malpractice claim was time-barred, the court held that the attorney's "fraudulent concealment of facts supporting plaintiffs' legal malpractice cause of action" extended the statute of limitations. The "fraudulent concealment" included failing to advise the clients of facts such as the true status of their case and offering false assurances that the case was "going very well." The court did not hold that attorneys have a duty to disclose that the client had a cause of action for malpractice against the attorneys.
The treatise, "Legal Malpractice," vol. 2, sec. 14.22, Mallen & Smith (2007), states, "A corollary of the fiduciary obligations of undivided loyalty and confidentiality is the attorney's responsibility to promptly advise the client of any important information that may impinge on those obligations. This means that there must be complete disclosure of all information that may bear on the quality of the attorney's representation. This disclosure must include not only all material facts but also should include an explanation of their legal significance."
Providing to a client the material facts and their legal significance, however, does not mean that the attorney must also inform the client of the legal conclusion that the attorney has committed legal malpractice.
In In re Smith, 168 Ill.2d 269, 659 N.E.2d 896 (1995), the Illinois Supreme Court explained that, under Rule 1.4(a), a lawyer has a duty to communicate with his clients in order to keep them both "reasonably informed about the status" of their cases and to "promptly comply" with their requests for information.
Thus, while there is a duty to disclose to one's client the material fact that the statute of limitations has passed and the case has not been filed, as well as the legal significance of those facts, which is that the case is time-barred, there is generally no duty to go a step further and advise the client that the attorney has committed malpractice.
There are some circumstances in which a lawyer may be obligated to disclose to a client that the client has an actual or potential malpractice claim. In Leonard v. Dorsey & Whitney LLP, 553 F.3d 609 (C.A.8, 2009), the court determined that a lawyer is not liable for failing to disclose a possible malpractice claim unless the potential claim creates a conflict of interest that would disqualify the lawyer from representing the client.
"Legal Malpractice," vol. 2, sec. 23.5, Mallen & Smith (2007), explains that a duty of disclosure arises when the lawyer knows that "there is a nonfrivolous malpractice claim against him such that there is a substantial risk that the lawyer's representation of the client would be materially and adversely affected by his own interest in avoiding malpractice liability." See Restatement (Third) of the Law Governing Lawyers, Sections 121, 125.
These authorities recognize the duty to disclose a malpractice claim only when there is an ongoing, attorney-client relationship and the actual or potential malpractice claim could interfere with the lawyer's exercise of judgment on behalf of the client.
Absent a conflict of interest situation arising out of continued representation, however, not only is there no duty to say that one has committed malpractice, but for two reasons it would be improper for the lawyer to make such a statement. First, the lawyer would be giving legal advice to the client about a potential claim against himself or herself by opining that the client has a claim against the lawyer. Whether a client has or might have a cause of action for malpractice against the lawyer should be the subject of advice by an independent attorney. Second, such a statement is an admission against interest that could be used against the lawyer in the malpractice litigation. As a general rule, lawyers who have malpractice insurance have a duty under their policies to cooperate in the defense of any malpractice claim. Making unnecessary admissions of liability by acknowledging that malpractice has been committed could be considered a violation of the duty of cooperation and could affect coverage.