What to Do When You Drop the Ball?
For a practicing lawyer, few things are worse than realizing you’ve made a mistake in case.
When it happens – and if you practice long enough, it will – the big question is what to do next.
“Some mistakes are harmless and immaterial,” says Lawyers Mutual attorney and Relationship Manager Will Graebe. “Other mistakes may be fatal to your client’s case. In between those two extremes are mistakes that cause your client to suffer some negative consequences or create the possibility of negative consequences in the future. What is required of you when you make a mistake depends on the nature and severity of the error. Failure to make appropriate and timely disclosure of errors can result in adverse disciplinary, malpractice and coverage consequences.”
Why choose Lawyers Mutual for your financial protection? One reason is experience. Lawyers Mutual has been in business since 1977 and insures more than 8000 lawyers in North Carolina. We’ve been providing continuous protection from professional liability to NC lawyers longer than any other insurance company. Another reason is stability. The company’s financial strength is absolute. Since 1999, Lawyers Mutual has paid dividends fourteen times, with more than $8 million dollars returned to policyholders since 2011. Want even more reasons? Visit our website, give us a call, or ask a colleague why Lawyers Mutual is the smart choice for liability coverage.
Don’t Fall on Your Sword
In an article titled, “Own Your Mistakes But Don’t Fall on Your Sword,” Graebe offers pointers for appropriately dealing with mistakes. Here are some highlights:
- In 2015 FEO 4, the State Bar ruled that, when a lawyer makes a material mistake on a client matter, and that mistake could result in financial loss to the client or a disadvantage in the client’s position, the lawyer has a duty to disclose the mistake and its effect on the lawyer’s continued representation. That obligation is not relieved simply because the lawyer “thinks” she can fix the error. If there is some chance that the attempted fix could fail and harm would result, the lawyer must disclose the error. Failure to make the necessary disclosure may result in an ethics complaint for violation of Rule 1.4(a)(3) (duty to keep client reasonably informed about the status of their matter).
- Materiality can be a tricky issue. On one end of the spectrum are simple typographical errors that have no impact on the document or pleading. Those are clearly not material. On the other end of the spectrum are errors that are or might be fatal to a client’s matter (e.g., missed statute of limitations). Those are clearly material and must be disclosed. Other kinds of errors require a closer analysis. If you are uncertain, you should seek guidance from the State Bar or discuss the issue with one of the claims attorneys at Lawyers Mutual.
- Once it is determined that the mistake is material, disclosure must be made as soon as possible. Often, when a lawyer discloses a mistake, the client will ask whether she has a malpractice claim against the lawyer. The opinion makes clear that the lawyer is ethically prohibited from giving any advice about whether the client has a malpractice claim against the lawyer. The lawyer in this situation should refuse to answer that question and should advise the client to seek independent counsel.
- Material mistakes by a lawyer can also raise conflict of interest concerns. Under Rule 1.7(a)(2), a lawyer may not represent a client if the representation may be materially limited by the lawyer’s personal interests.
- When an error is discovered, time is of the essence. Often, there is a window of opportunity to repair a mistake. If the lawyer procrastinates in disclosing the error and addressing the situation, the lawyer may miss that window of opportunity. For example, if a lawyer fails to file a timely answer and default is entered against the client as defendant, the court may be less likely to grant relief if the lawyer has delayed filing a motion to set aside the default. In other situations, a lawyer’s delay in disclosing and addressing an error can cause additional damages.
- Malpractice insurance policies are “claims-made” in nature. These policies provide coverage for claims first made and reported during the policy period. Insured lawyers are required to give notice not only of actual claims against the insured lawyer, but also potential claims. If an act or omission of a lawyer could reasonably be expected to be the basis of a claim or suit, the lawyer has a duty to report the matter as soon as practicable. Failure to report such matters could jeopardize the lawyer’s coverage under the policy.
Everyone makes mistakes. When it happens to you, Lawyers Mutual has your back. For nearly half a century, Lawyers Mutual has been the smart choice for professional liability coverage for North Carolina attorneys. We cover the state from Murphy to Manteo. We insure large firms, solo practitioners and everyone in between. We help new lawyers enter the profession with confidence, and we help keep seasoned veterans safe and successful. The numbers speak for themselves. Lawyers Mutual has been in business since 1977, making us the only insurance carrier to provide continuous protection over that period. Today we insure more than 8000 lawyers in North Carolina. Most of them will stick with us until they retire. Why? Because they know we are here for them today and will be here tomorrow, bringing protection and peace of mind in turbulent times. Visit our website, give us a call, or ask a colleague why Lawyers Mutual is the smart choice for liability coverage.
