by Robert K. Sall

Any of us can make a mistake. The post-it note reminder falls off the computer screen. A deadline is missed. An aggressive opponent seizes advantage and won’t stipulate to allow late service. The situation is one that could result not only in the loss of the client’s claims, but a foreseeable malpractice lawsuit when the dust has settled. What is the attorney going to do?

There are rarely any easy answers when an attorney errs. The first course of action may be an assessment of the client’s options, such as the termination of the attorney-client relationship, or engaging other counsel; in either case (whether through the attorney’s services or those of other counsel) seeking to fix the error to avoid injury to the client resulting from the error, and seeking relief from the court based upon excusable neglect.

In the context, for example, of a late designation of experts, California civil procedure provides a limited remedial course of action—that of filing a motion asking the court to permit a late designation of experts based upon mistake or excusable neglect: “The court shall grant leave to submit tardy expert witness information only if . . . The court has determined that the moving party . . . Failed to submit the information as the result of a mistake, inadvertence, surprise, or excusable neglect . . . .” Cal. Civ. Proc. Code § 2034.720(c)(1).

The application for relief requires the submission of evidence sufficient to establish these elements among other factors specified in the statute. In other contexts, such as pleading errors and defaults, lawyers may similarly seek relief from error under section 473 of the Code of Civil Procedure. In the context of a missed deadline to designate experts, the statutory remedy in section 2034.720 is quite specific as to the course of action necessary to obtain relief, and sets forth the findings that must be made. The circumstances require swift and decisive action in order to have a reasonable hope of obtaining relief for the client.

So what kind of disclosure to the client is required? First, there is the consideration that the client must be fully informed of the facts. Second, the client should be advised regarding the available legal options to remedy the situation.

From the standard-of-care perspective, attorneys have a duty to give advice to the client consistent with that other similarly situated attorneys would provide in the same circumstances. One of the attorney’s basic functions is to advise.¹ “Liability can exist because the attorney failed to provide advice. Not only should an attorney furnish advice when requested, but he or she should also volunteer opinions when necessary to further the client’s objectives.”² Where an attorney errs in an ongoing representation of the client, it is reasonably apparent that duty requires the attorney not only to research but also advise the client of the possible remedy currently available to avoid harm and fix the mistake.

From the ethical perspective, the attorney’s duties to the client are equally straightforward. Rule 3-500 of the Rules of Professional Conduct imposes a duty to communicate with the client about significant developments during the course of the representation. It can hardly be said that missing an important deadline is not a significant development. Attorneys also have a fiduciary duty to the client of loyalty and candor—uberrima fides—which has been defined to include “the most abundant good faith; absolute and perfect candor or openness and honesty; the absence of any concealment or deception, however slight.”³

The California Supreme Court has held, in Beal Bank SSB v. Arter & Hadden LLP, that fiduciary duty obligates lawyers to disclose material facts to their clients, including disclosure of acts of malpractice.⁴ Likewise, in Neel v. Magana, the Supreme Court concluded that fiduciary duty in an attorney-client relationship includes “the obligation to render a full and fair disclosure to the beneficiary of that relationship of all facts which materially affect his rights and interests.”⁵ Granted, in the circumstance of a missed deadline, no injury may yet have resulted from the error and may not ever result if the opposing party does not raise it—a cause of action for professional negligence may not be ripe. But missing a deadline that will have consequences for the client is an omission that may lead to a malpractice claim. The Restatement (Third) of the Law Governing Lawyers suggests that after making a material error, the lawyer should not only disclose the existence of a potential malpractice claim, but that the error potentially creates a conflict of interest if the client has lost rights and may lead to the attorney’s withdrawal.⁶ At least, ethically speaking, the facts must be disclosed. Since the remedial effort also frequently requires prompt action, it likewise follows that disclosure to the client must be made promptly and provide sufficient information for the client to properly address whether or not to change legal counsel, and consider the legal options to pursue relief.

Once the client has been made aware of the facts and the available remedy for an attorney’s error, there is the consideration that proving mistake or excusable neglect may require the attorney’s formal admission of error in a pleading to be filed in court. Sometimes, the client will have consulted with other counsel who is now advising the client and possibly taking over the representation. Whether the attorney has volunteered to assist, or the client, whether or not represented by another lawyer, has requested such assistance, it is likely that an attorney declaration will be needed to establish the elements necessary to obtain relief, such as under Code of Civil Procedure section 473 or section 2034.720. This is where the attorney’s personal interests and those of the present or former client may diverge.

The attorney and the client have the common goal of obtaining relief that will result in the client suffering no harm as a result of the attorney’s mistake. However, if the attorney continues to represent the client, and the attorney’s personal interests result in having a legal, business, financial, or professional interest in the subject matter of the representation, there may be a duty to make written disclosure under Rule 3-310(B) of the Rules of Professional Conduct. Rule 3-310 provides that a member of the State Bar shall not accept or continue representation of the client without providing written disclosure where the member has or had a legal, business, financial, or professional interest in the subject matter of the representation. As used in Rule 3-310, “disclosure” means “informing the client or former of the relevant circumstances and of the actual and reasonably foreseeable consequences to the client or former client.” Though debated by ethicists, it is possible that an attorney’s mistake coupled with the likely exposure to a malpractice claim may rightly be considered a professional interest in the subject matter of representation.

Making a written disclosure and providing a declaration that admits error may expose the attorney to other consequences, lending support to a future claim of legal malpractice. The extent that an admission of fault might be required as a part of that disclosure is not well settled and remains the subject of debate among lawyers in the malpractice arena. Nevertheless, to obtain relief from the court, the client needs to establish error and excusable neglect. This is in all probability going to require the lawyer responsible for the error to provide the evidence necessary to establish reasons supporting mistake and excusable neglect.

The attorney faced with this decision may find some comfort in the California Supreme Court’s decision, in Smith v. Lewis.⁷ There it was held that a lawyer’s declaration of fault submitted in support of a request for relief under Code of Civil Procedure section 473 should have been excluded from evidence under Evidence Code section 352 because its limited probative value in that case was exceeded by its prejudicial effect. “On its face, the declaration, under oath, is manifestly a confession of error on the part of defendant. The jury possibly could have misunderstood its context or its purpose . . . .”⁸ Though dicta, the court stated:

Were we to sanction the admissibility of such evidence, tension might develop between an attorney’s duty to zealously represent his client (citation omitted) and his instinct of self-protection. As a result, the attorney could become reluctant to seek an amended judgment under Code of Civil Procedure § 473, and the quality of legal representation in the state might suffer accordingly. In short, an attorney should be able to admit a mistake without subjecting himself to a malpractice suit. Therefore, we conclude, the trial court erred in admitting the declaration into evidence.⁹

While this decision lends support for exclusion of the declaration, in each instance the application of Evidence Code section 352 depends upon the trial court’s weighing probative value of the evidence against its prejudicial effect, which may not be the same in every case.

Some commentators have suggested the attorney may negotiate a contractual arrangement with a former client limiting the use of such a declaration in subsequent malpractice proceedings—a form of “use immunity” that enables the attorney “to do the right thing” and support the effort to obtain relief while preserving limited protection.¹⁰ Whether negotiating such a contractual arrangement with a current client, where the attorney continues to represent the client after making the error, creates an actual conflict of interest is beyond the scope of this article, but such an agreement would seem to require compliance with Rule 3-300 of the Rules of Professional Conduct pertaining to business transactions with a client. This would generally require that the terms of the agreement be fair and reasonable to the client, that the terms be fully disclosed in writing in a reasonably understandable manner, that the client be advised in writing of the right to consult independent counsel and have the opportunity to do so, and only thereafter, that the agreement be made in writing.

Caution is also advised in that an admission of attorney fault may violate provisions of the attorney’s professional liability insurance policy, perhaps even negating the coverage if there is a policy covenant against admitting such liability. Careful consideration of the professional liability policy would be prudent to avoid coverage implications, and it may be necessary to swiftly consult with the insurance carrier before the attorney participates in this process as a means of claims avoidance and repair.

In all of this, the attorney may be tempted to withdraw from representation. Caution again is dictated. The propriety of withdrawal depends upon a number of considerations apart from the occurrence of attorney error, and must be analyzed in the light of the client’s interests and the risk of prejudice where the situation cries out for immediate corrective action. Withdrawal may either be mandatory under Rule 3-700(B), or permissive under Rule 3-700(C), but the mere fact that the attorney has made a significant mistake is not one of the enumerated grounds. Rule 3-700(A)(2) of the Rules of Professional Conduct provides:

A member shall not withdraw from employment until the member has taken reasonable steps to avoid reasonably foreseeable prejudice to the rights of the client, including giving due notice to the client, allowing time for employment of other complying with rule 3-700(D) [pertaining to turning over client funds, papers and property] and complying with applicable laws and rules.

The withdrawal from representation is subject to certain ethical requirements including obtaining authority of the court where the client does not consent. Where the attorney’s error has placed the client in immediate jeopardy, such withdrawal may be unjustified and lead to further harm.

Whether the attorney remains in the case and prosecutes a motion for relief on behalf of the client, or instead, has been substituted out of the representation and is asked by successor counsel to provide a declaration to establish mistake or inadvertence, the attorney’s personal interests are likely in play. Such a declaration may find a use in a later action for legal malpractice either as an admission of liability, if not as direct evidence, possibly for purposes of impeachment. The attorney may have to balance competing interests such as the duty or the desire to assist a present or former client against the risk of exposing oneself to liability and impairing the ability to defend a later malpractice claim.

When the legislature drafted Code of Civil Procedure section 340.6 (the statute of limitations for legal malpractice), it wisely included in subsection 340.6(a)(2) a provision tolling the limitations period during the time that the attorney continues to represent the client in the specific subject matter in which the wrongful act or omission occurred. One policy behind this “continuous representation” tolling provision was to enable attorneys the opportunity to fix their mistakes or mitigate the impact by continuing to represent the client without being subjected to a malpractice claim while that effort is under way. This policy also protects the client against being forced to initiate a lawsuit while the opportunity to remedy the error remains, thereby destroying the relationship of trust and confidence that is a hallmark of the attorney-client relationship. The policy behind continuous representation tolling encourages attorneys to stay on board where necessary to assist the client to remedy the lawyer’s error. Attorneys faced with this situation and weighing the options should always consider what is in the best interests of the client and whether they can continue to exercise independent professional judgment in favor of the client notwithstanding their own error.

ENDNOTES

1. (1) Nichols v. Keller, 15 Cal. App. 4th 1672 (1993) (finding worker’s compensation attorney responsible for failure to advise the client regarding potential for third-party claim against manufacturer even though outside the scope of his representation).
2. (2) Id. at 1683-84.
3. (3) David Welch Co. v. Erskine & Tulley, 203 Cal. App. 3d 884, 890 n.2 (1988) (citing Black’s Law Dictionary (4th ed. 1968)).

    

4. (4) Beal Bank, SSB v. Arter & Hadden, LLP, 42 Cal. 4th 503, 514 (2007).
5. (5) Neel v. Magana, 6 Cal. 3d 176, 188-89 (1971).
6. (6) Restatement (Third) of the Law Governing Lawyers § 20 cmt. C (Am. Law Inst. 2000). “If the lawyer’s conduct of the matter gives the client a substantial malpractice claim against the lawyer, the lawyer must disclose that to the client.” The Restatement suggests that the lawyer disclose “the possibility of a malpractice suit and the resulting conflict of interest that may require the lawyer to withdraw.” Id.
7. (7) Smith v. Lewis, 13 Cal. 3d 349 (1975).
8. (8) Id. at 364.
9. (9) Id. at 364-65.
10. (10) See David B. Parker and Nancy L. Webster, After Attorney Error: What is the Duty to Assist the Former Client in Mitigating Consequences, Los Angeles Cty. Bar Assoc. Cty. Bar Update, Vol. 23, No. 10, at 3 (Nov. 2003).

Robert K. Sall is a shareholder with Sall Spencer Callas & Krueger in Laguna Beach. He is a Certified Specialist in Legal Malpractice Law by the State Bar of California’s Board of Legal Specialization, and lectures frequently for OCBA on lawyer conduct, fee disputes, and legal ethics.